Given the following information, formulate an inventory management system. The item is demanded 50 week a year. $12.00 Item cost Order cost 525 per week 30 per week $300.00 Average demand Standard deviation of weekly demand Lead time Annual holding cost (%) 2 week 25% of item cost 26,250 Annual demand Service probability 95% Formulas for inventory control are provided below. Inventory control Single-period model. Cumulative probability of not selling the last unit. Ratio of marginal cost of underestimating demand and marginal cost of overestimating demand. PS Co + C Q-model. Optimal (or economic) order quantity. Qopt = 2DS H Q-model. Reorder point providing a safety stock of zo. R = dL + Z0 Standard deviation of demand over a period of n days. (d, - d) Od = n Q-model. Safety stock calculation. SS = ZOL P-model. Optimal order quantity in a fixed-period system with a review period of 7 days and lead time of L days. q=d(T + L) + Z0T+L-1 Average inventory. Average inventory value = (Q/2 + SS)C Economic order quantity (with carrying cost percentage). Q = Q-model. Total annual cost for an order Q, a per-unit cost C, setup cost S, and per-unit holding cost H. D TC = DC + H Q-model. Reorder point R based on average daily demand d and lead time L in days. R = dL Average daily demand over a period of n days. =1 di d = Standard deviation of a series of independent demands. 0 = 0 +0 + ... + 0 P-model. Safety stock calculation. SS = ZOT+L P-model. Standard deviation of a series of independent demands over the review period of T and lead time of L. T+L OT+L = 0 i=1 Inventory turn. D DC (Q/2 + SS)C (Q/2 + SS) 2DS iC Inventory turn = Os+. Question 9 Not yet answered Points out of 1.00 Flag question a. What is the economic order quantity? (Enter only a number with one decimal place. e.g., 12.3) Answer: Question 10 Not yet answered Points out of 1.00 P Flag question b. What is the reorder point? (Enter only a number with one decimal place. e.g., 12.3) Hint: for service probability of 95%, z = 1.64