Formulas you may need for this problem: DS ;C(Q") = 2DSH; set-up cost holding cost 2DS safety stock=zovL; ROP = d L+SS A local appliance store in Los Angeles has an annual demand of 1,200 high-end refrigerators (on average 3.288 per day). Regardless of the number of units it orders each time, it pays the supplier $1,000 for flat-rate shipping and an additional $2,000 for each refrigerator. For example, if it orders 2 units then it pays $1,000 + $2,000*2 = $5,000. The holding cost of refrigerators come from two sources: (i) annual interest rate of 5% for the purchase cost, and (ii) annual storage cost of $1,200 for each refrigerator. Currently, this store orders once a month. a) (2 point) What is the current annual setup cost? b) (2 point) What is the current annual holding cost? c) (2 points) If the current annual setup cost from a) and annual holding cost b) were the same, can we claim for 100% that the total inventory related cost in e) has already achieved a minimum? Please explain your answer whether your answer is yes or no. (Hint: annual set DS up cost formula is and the annual holding cost formula is 101 Now let's think about an optimal way of ordering which minimizes the inventory related cost. d) (2 points) What is the Economic Order Quantity? (Round to the nearest integer) e) (2 points) What's the annual optimal inventory related cost? (Round to the nearest integer) f) (1 point) Under what scenario, can EOQ and ClQ*) have the same value? Assume D, S> 0. Next, suppose the daily demand of refrigerators follows a normal distribution with mean 3.288 and std dev is 0.5. The lead time is 1 week, and the management wants to ensure a 95% service level (the corresponding 2-value is 1.64), g) (2 points) What is safety stock (SS)? (Round to the nearest integer) h) (2 points) What is the ROP2 (Round to the nearest integer) 1) (2 points) What is the average inventory level? (Round to the nearest integer)