$Ch7$ Quiz i

$5$

$!$

Requlred Information

Cooper Company has average demand of $75$ units per day. Lead time from the supplier averages $10$ days. The combined standard deviation of demand during lead time is $25$ units. The item costs $$55$ and inventory carrying cost is $28\%.$

$10$

Answers to the next two questions are based on this information.

$1$ standard deviation covers $84\mathrm{.}13\%$

$1\mathrm{.}04$ standard deviations covers $85\%$

$1\mathrm{.}28$ standard deviations covers $90\%$

$1\mathrm{.}65$ standard deviations covers $95\%$

$1\mathrm{.}96$ standard deviations covers $97\mathrm{.}5\%$

$2$ standard deviations covers $97\mathrm{.}72\%$

$233$ standard deviations covers $99\%$

$3$ standard deviations covers $99\mathrm{.}86\%$

$6$ standard deviations covers $99\mathrm{.}99966\%$

How much is the annual inventory carrying cost of the safety stock because of this decision? Round your answer to the nearest integer value.

Multiple Choice

$$351$

$$755$

$$594$

$$610$