An electronics store sells a personal desktop super-computer for $2,575. The wholesale price is $1,545. The store estimates the weekly demand is Poisson distributed and average 0.75 units. The store's annual inventory holding cost rate is 20%. Assume orders are made weekly and the lead time to receive an order is 6 weeks.

The Poisson Loss Function values are located on pages 481-482 of your textbook.

1. What base stock level minimizes inventory while achieving a 99% in-stock probability? (Report your answer as an integer.)

2. Suppose the base stock level is S=9.

1. What is the average inventory held at the end of the week? (Report your answer to two decimal places.)
2. What is the average on-order inventory? (Report your answer to two decimal places.)
3. What is the probability a stockout occurs during a week? (Report your answer as a decimal to four decimal places.)
4. What is the probability the store is out of stock at the end of a week? (Report your answer as a decimal to four decimal places.)
5. What is the probability the store has two or more units of inventory at the end of a week? (Report your answer as a decimal to four decimal places.)

3. Suppose the store changes is considering a new replenishment policy in which an order is placed every 2 weeks.

1. What base stock level yields at least a 99% in-stock probability while minimizing inventory? (Report your answer as an integer.)
2. What is the average on-order inventory? (Report your answer to two decimal places.)