A manager is analyzing the inventory management for the component RF Receiver- Information Below. This component is ordered once a month. (first working day of the month)

The demand of this component follows a normal distribution with a standard deviation of 0.3 units per day.

The annual unit holding cost represents 10% of the unit cost and the order cost is $25.

The production plant is open 240 days per year and 20 days every month

The supplier of component RF Receiver can deliver in 6 working days. We wish to maintain a service level of 98%.

Z value for 98% = 2.06

• The company has 83 RF Receivers in stock ending April 30^th, How many RF Receivers should the order in the morning of May 1^st? 5 points
• How much money would they save if they switched to Reorder point Model? 10 points