Question: For Isa Distributors in Problem 17, we were given Q =25, D=200, C = 5 and a normal lead-time demand distribution with 12 and =

For Isa Distributors in Problem 17, we were given Q =25, D=200, C = 5 and a normal lead-time demand distribution with 12 and = 2.5.

a. What is Isa's reorder point if the firm is willing to tolerate two stock-outs during the year?

b. What is Isa's reorder point if the firm wants to restrict the probability of a stock-out on any one cycle to at most 1 per cent?

c. What are the safety stock levels and the annual safety stock costs for the reorder points found in parts

(a) and (b)?

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