Thomas' Bike Shop stocks a high-volume item that has a normally distributed demand during lead time. The average daily demand is 100 units, the lead time is 4 days, and the standard deviation of demand of 20 units.
1.) What should the reorder point be to satisfy a 90% service level to Thomas?
2.) Suppose Thomas decides to cut back on safety stock by 40%, what would be his new service probability?
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