a. What is the optimal target level (order-up-to level)? (Use Excel's NORMSINV() function to find the correct critical value for the given -level. Do not round intermediate calculations. Round "z" value to 2 decimal places and final answer to the nearest whole number.)

b. If the service probability requirement is 91 percent, the optimal target level will:

• Increase

• Decrease

• Stay the same

Palin's Muffler Shop has one standard muffler that fits a large variety of cars. The shop wishes to establish a periodic review system to manage inventory of this standard muffler. Use the information in the following table to determine the optimal inventory target level (or order-up-to level). per order Annual demand Standard deviation of daily demand Item cost Annual holding cost Review period 2,200 6 $38.00 23 18 mufflers mufflers per working day per muffler % of item value working days Ordering cost Service probability Lead time Working days $ 55 88 % 5 working days 275 per year