.. 12.13 Joe Henry's machine shop uses 2500 brackets during the course of a year. These brackets are purchased from a supplier 90 kilometres away. The following information is known about the brackets: 2500 $1.50 Annual demand: Holding cost per bracket per year: Order cost per order: Lead time: Working days per year: $18.75 2 days 250 Problem 5. Joe Henry (see question 12.13) notices that the demand for the unit he is studying is not constant, but can reasonably be approximated by a normal distribution with average weekly demand of 50 units and a standard deviation of 10 units. (All other data are as in question 12.13 (Problem 2), including the modified lead time of three weeks.) a) If the cycle service level is to be set at 90%, find the reorder point as well as the level of the safety stock. b) For this system find the annual ordering cost, the annual cost of holding the cycle inventory. The annual cost of holding the safety stock, the annual cost of goods and the total annual inventory cost. c) Now assume that the lead time is also variable. Specifically, the lead time is normally distributed with a mean of 3 weeks and a standard deviation of 0.6 weeks. .. 12.13 Joe Henry's machine shop uses 2500 brackets during the course of a year. These brackets are purchased from a supplier 90 kilometres away. The following information is known about the brackets: 2500 $1.50 Annual demand: Holding cost per bracket per year: Order cost per order: Lead time: Working days per year: $18.75 2 days 250 Problem 5. Joe Henry (see question 12.13) notices that the demand for the unit he is studying is not constant, but can reasonably be approximated by a normal distribution with average weekly demand of 50 units and a standard deviation of 10 units. (All other data are as in question 12.13 (Problem 2), including the modified lead time of three weeks.) a) If the cycle service level is to be set at 90%, find the reorder point as well as the level of the safety stock. b) For this system find the annual ordering cost, the annual cost of holding the cycle inventory. The annual cost of holding the safety stock, the annual cost of goods and the total annual inventory cost. c) Now assume that the lead time is also variable. Specifically, the lead time is normally distributed with a mean of 3 weeks and a standard deviation of 0.6 weeks