Question: A new logistics analyst has approached you regarding a potential problem. Her analysis indicates the cost of a back order is $ 5 0 for

A new logistics analyst has approached you regarding a potential problem. Her analysis indicates the cost of a back order is $50 for our Autographed Footballs, but she is not sure what the appropriate safety stock should be. Given this back order cost, what probability of a stock out would be appropriate to use to manage the inventory levels?
Football cost $200
Annual Demand 5000 units
Order Placement Costs per Order $250
Cost to hold the item per year 40%
Economic order quantity 177
Lead Time 2 weeks
Standard Deviation of Forecasted Demand During Lead Time 20

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