Question: A computer cable manufacturing company is evaluating two outside suppliers for a connector that is used in its production. The following data are known: The

A computer cable manufacturing company is evaluating two outside suppliers for a connector that is used in its production. The following data are known:
The daily usage for the connectors follows a Normal distribution with an average of 1000 and a standard deviation of 100.
Assume 365 working days every year.
Annual inventory holding cost of this connector is assessed as 15% of the purchase cost.
It wants to achieve a 95% service level for the connector.
Each unit of shortage costs $500.
Supplier A is local, so it provides a faster (and more reliable) lead time, and the shipping cost is also lower. Supplier B is a bigger, national supplier, and it can offer a better price on each unit (purchase cost). The relevant parameters are given in the following table.

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