Ned's Natural Foods sells unshelled peanuts by the pound. Historically, Ned has observed that daily demand is normally distributed with a mean of 80 pounds and a standard deviation of 26 pounds. Lead...

Extracted text: Ned's Natural Foods sells unshelled peanuts by the pound. Historically, Ned has observed that daily demand is normally distributed with a mean of 80 pounds and a standard deviation of 26 pounds. Lead time also appears normally distributed with a mean of 8 days and a standard deviation of o1. Suppose one year has 365 days. The ordering cost is $600, and the inventory carrying cost is $1.2/pound/year. 1. Suppose oL = 1 day and Ned aims to limit the stockout risk during lead time to 3.5 percent. At what level of inventory should the manager place an order? 2. Suppose Ned uses a reorder point of 900 pounds and the service level is 88.1 percent. Then what is the standard deviation of lead time (oL)?