4. Inventory - Continuous Review Policy (10 points): A retailer guarantees a 95% service level for all stock items. Stock is replenished from a single wholesaler who has fixed lead time of 4 weeks. The retail price for the particular item is $200 and the annual holding cost per unit is estimated as 20% of the retail price. Reordering costs involve overhead for administrative work as well as shipment costs which are estimated as $400 per order. a) (5 points) What reorder point should the retailer adopt for an item which has normally distributed demand with a mean of 100 units a week and a standard deviation of 10 units? b) (5 points) Through a lean implementation the retailer would like to decrease the annual average inventory holding cost by half. What possible changes can you do to achieve this goal? If you were allowed only one change what parameter would you change to achieve this (estimate the required parameter change)