A firm uses a continuous review system, where inventory position of an item is updated after each transaction. The firm operates 50 weeks per year. One of the items has the following characteristics: Annual demand (D) = 20000 units/year The product cost is $20/unit Ordering cost (S) = $25/order Holding Cost to hold one unit for 1 year (H) = 20% of the product cost Replenishment lead-time (L) = 2 weeks Standard deviation of weekly demand = 130 units Target cycle service level = 95% Compute:

a) the optimal order size

b) number of orders

c) ordering cost

d) safety stock

e) average inventory

f) carrying cost

g) the reorder point.