Consider a periodic review system, where orders are placed every 20 days. The firm strives to provide a 95.5% cycle service level (Z=1.695). Demand averages 500 units per day, and the standard deviation of demand per day is 112 units. Lead time is 12 days.

(Round all quantities to the nearest whole unit)

a.How many units of safety stock should be held?

Safety Stock =1074units

b.What should the target inventory level (order-up-to level) be?

Target =17074 units

c.Suppose that it is time to review the item. There are 150 units in inventory, and there is an outstanding backorder for 400 units. An order for 204 units is on the way. How many units should be ordered now?

Order Quantity =????? units