Question: 5. (20 points) An office suppliers distributor uses a continuous review inventory control system for one of its SKUs. The following information is available on

5. (20 points) An office suppliers distributor uses a continuous review inventory control system for one of its SKUs. The following information is available on the item. Order cost = $60/order Unit cost = $300 Holding cost rate = 40%/year Number of working days per year = 300 Demand = 900 chairs/year Standard deviation of daily demand = 2.4 chairs Average lead time = 4 days Required cycle-service level= 90% A continuous review system is used to control inventory. a. What is the economic order quantity? b. What should be the safety stock be to have a 90% service level? c. What should be the reorder point be to have a 90% service level? d. What is the total annual cost? Show all calculations to earn full credit

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