Question: A Plumbing supplier uses a certain pvc pipe that it maintains in inventory. Pertinent data about this item is below. Daily Demand 5 0 units

A Plumbing supplier uses a certain pvc pipe that it maintains in inventory. Pertinent data about this item is below.
Daily Demand 50 units
std. dev of demand 15 units
Average Lead time 7 days
Lead time std. dev 2 days
Annual Carrying Cost 30% per year
Procurement Order Cost $50
Stock-out Cost $15
Product Value $45
In-stock Probability 85%--> Z -1.04; E(z)=.0772
Using the formulas provided in the Uncertainty Lecture covering probabilistic demand to solve the problem. Assume 250 working days in the year.
*Hint you will solve for Basic EOQ, to solve for the reorder point you need the formula for demand and lead time are variable.
What is the annual demand?
What is the basic EOQ?
What is the standard deviation of demand during lead time?
What is the reorder point?
What is the safety stock?

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