(Service Level Questiоns) Avа runs аn оutdоor geаr rental company specializing in luxury camping tents. Each tent costs $200, and restocking takes one year. She applies a 10% annual holding cost rate and estimates a $50 goodwill loss for each stockout. Ordering costs $120. Ava expects to rent 500 tents per year, with a demand standard deviation of 150 tents. Demand is normally distributed. NOTE: The question statement above is the same for all 7 questions in this exam. Question: What is the expected number of shortages in a cycle, n(R), if Ava wants to have 85% of Type 2 Service?
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