3. Chicago's Hard Rock Hotel distributes a mean of 1,000 bath towels per day to guests at the pool and in their rooms. This demand is normallydistributed with a standard deviation of 100 towels per day, based on occupancy. The laundry firm that has the linen contract requires a 2-daylead time. The manager will set a new order form for the bath tower on the first day of each month. The hotel expects a 98% service level tosatisfy high guest expectations. This month, before they place a new order, they still have 150 towers on hand.(a) What is the target inventory level? What is the order size?(b) Suppose the manager is asked to increase the time interval between the two orders to 45 days. If she does so, what will be the new targetinventory level?4. Summarize all the inventory models we learned so far including the basic assumptions, key decisions (whether to decide the order quantityand setup time), and how to combine the models to give the inventory policy.

Inventory management is a critical aspect of any business that involves the storage and distribution…

Answered: 3. Chicago's Hard Rock Hotel…

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