$97$ percent order$-$cycle service level?

d$.$ What reorder point is needed to provide an order$-$cycle service

level of $99$ percent?

e$.$ How much safety stock must the company hold to have a $99$

percent order$-$cycle service level?

Healthy Plants Ltd$.($HP$)$ produces its premium plant food in

$60-$pound bags. Demand for the product is $150,000$ pounds per week.

HP operates $50$ weeks per year and can produce $250,000$ pounds per

week. The setup cost is $$200$ and the annual holding cost rate is $$0\mathrm{.}55$

per bag. Currently, HP produces its premium plant food in batches of

$1,000,000$ pounds.

a$.$ Calculate the maximum inventory level for HP$.$

b$.$ Calculate the total annual costs of this operating policy.

Using the data provided in Problem $23,$ determine what will hap.

pen if HP uses the economic production quantity model to establish

the quantity produced each cycle.

a$.$ Calculate the economic production quantity $($EPQ$).$

b$.$ Calculate the maximum inventory level using the EPQ.

c$.$ Calculate the total annual cost of using the EPQ.

d$.$ Calculate the penalty cost HP is incurring with its current

policy.

Greener Pastures Incorporated $($GPI$)$ produces a high$-$quality

organic lawn food and weed eliminator called Super Green $($SG$).$

Super Green is sold in $50-$pound bags. Monthly demand for Super

Green is $75,000$ pounds. Greener Pastures has capacity to produce