E G H Problem 2. The annual demand for a product is 15,600 units. The weekly demand is 300 units with a standard deviation of 90 units. The cost to place an order is $31.20, and the time from ordering to receipt is four weeks. The annual inventory carring cost is $0.10 per unit. Find the reorder point necessary to provide a 98 percent service probability. Suppose the production manager is asked to reduce the safety stock of this time by 50 percent. If she does so, what will the new service probability be? 5 5 7 Annual demand Insert your formula in the blue cells below. Remember that all formulas begin with a = 3 3 O Annual holding cost (5) per unit Ordering cost- EOQ (Economic Order quantity) 2 DS H 11 22 13 14 Weekly demand Lead time From Standard normal distribution, - Stand deviation durnglead time 15 16 L7 LB 2.05 19 Re-order Point = R-L+20, 20 21 22 Current safety stock If safety stock is reduced by 50 percent, then ss- Z 23 24 25 04 Service probability (Use Excel function) 26 27