$2.$ Use the attached spreadsheet to quantitatively evaluate the airfreight option relative to current operations.

Quantify total annual inventory holding costs and total annual shipping costs using airfreight and seafreight. Just consider the products for the European market. Do not forget to consider pipeline inventory $($since HP owns the pipeline inventory from Vancouver to Europe$).$ Use the following assumptions:

$$ HP wants to minimize inventory while still achieving at least a $98\%$ service level $($in$-$stock probability$).$

$$ The lead time from Vancouver to Europe is $5$ weeks by the current method $($ocean$)$ and $1$ week by air.

$$ HP orders and receives inventory on a weekly basis $($which inventory model does it imply?$).(($Found in spreadsheet by Allison $-1.$ We use Periodic Review policy.????$))$

$$ There are $4\mathrm{.}33$ weeks per month and demand is independent across time.

$$ The product sells for $$450$ and marginal production cost is $$300.$

$$ Inventory carrying costs are $25\%$ per year from cost $($$$300).$

$$ Shipping via sea costs $$10$ per printer, whereas airfreight costs $$21$ per printer.