Question: Petromax Enterprises uses a continuous review inventory control system for one of Its SKUs. The following information is available on the item. The firm operates

Petromax Enterprises uses a continuous review inventory control system for one of Its SKUs. The following information is available on the item. The firm operates 50 weeks in a year.
Demand = 50.000 units/year
Ordering cost = $35/order
Holding cost = $2/unit/year
Average lead time 3 weeks
Standard deviation of weekly demand = 125 units
a. What is the for this item?
b. If Perromax wants to provide a 90 percent cycle- service level, what should be the safety stock and the reorder point?

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