Tara McCoy is the office administrator for the Departmentof Management at State University. The faculty uses a lot of printer paper and Tara is constantly reordering and fre-quently runs out. She orders the paper from the university central stores and several faculty have determined that thelead time to receive an order is normally distributed, with a mean of 2 days and a standard deviation of 0.5 day. The fac-ulty have also determined that daily demand for the paper is normally distributed, with a mean of 2.6 packages and astandard deviation of 0.8 packages. What reorder pointshould Tara use in order not to run out 99% of the time?
Inverse Normal Distribution
The method used for finding the corresponding z-critical value in a normal distribution using the known probability is said to be an inverse normal distribution. The inverse normal distribution is a continuous probability distribution with a family of two parameters.
Mean, Median, Mode
It is a descriptive summary of a data set. It can be defined by using some of the measures. The central tendencies do not provide information regarding individual data from the dataset. However, they give a summary of the data set. The central tendency or measure of central tendency is a central or typical value for a probability distribution.
Z-Scores
A z-score is a unit of measurement used in statistics to describe the position of a raw score in terms of its distance from the mean, measured with reference to standard deviation from the mean. Z-scores are useful in statistics because they allow comparison between two scores that belong to different normal distributions.
Tara McCoy is the office administrator for the Department
of Management at State University. The faculty uses a lot of
printer paper and Tara is constantly reordering and fre-
quently runs out. She orders the paper from the university
central stores and several faculty have determined that the
lead time to receive an order is normally distributed, with a
mean of 2 days and a standard deviation of 0.5 day. The fac-
ulty have also determined that daily demand for the paper is
normally distributed, with a mean of 2.6 packages and a
standard deviation of 0.8 packages. What reorder point
should Tara use in order not to run out 99% of the time?
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