1. A company operating under a continuous review system has an average demand of 50 units per week for the item it produces. The standard deviation in weekly demand is 20 units. The lead-time for the item is six weeks, and it costs the company $30 to process each order. The holding cost for each unit is $10 per year. The company operates 52 weeks per year. Use the Z-table (normal distribution table) that I posted in the inventory folder. Q2) What is the desired safety stock level if the company has a policy of maintaining a 90% cycle-service level? A. Approximately 63 units B. Approximately 48 units C. Approximately 34 units D. Approximately 57 units

2. A company operating under a continuous review system has an average demand of 50 units per week for the item it produces. The standard deviation in weekly demand is 20 units. The lead-time for the item is six weeks, and it costs the company $30 to process each order. The holding cost for each unit is $10 per year. The company operates 52 weeks per year. Use the Z-table (normal distribution table) that I posted in the inventory folder. Q3) What is the reorder point if the company finally decides to implement a 95 percent cycle-service level? A. 380 B. 335 C. 425 D. 260