1.A company (using the Fixed order quantity model) wants to determine its reorder point (R). Demand is variable and the company wants to build a safety stock into R. If the average daily demand is 12, the lead time is 5 days, a desired service probability of 97.5%, and the standard deviation of usage during lead time is 3, which of the following is the desired value of R (Reorder Point)? Please round up if you have a decimal value.

a.60

b.62 (wrong)

c.6

d.66

2.Using the fixed-time-period inventory model, and given an average daily demand of 75 units, 7 days between inventory reviews, 2 days for lead time, 50 units of inventory on hand, a service probability of 95 percent, and a standard deviation of daily demand is 3 units, which of the following is the order quantity?

a.625

b.630 (i put this and it was wrong)

c.640

d.675