Question: In an (s,Q) inventory system, the demand is normally distributed with mean of 4000 units per year and a variance of 90,000 (unit)^2. Every time

In an (s,Q) inventory system, the demand is normally distributed with mean of 4000 units per year and a variance of 90,000 (unit)^2. Every time an order is placed a cost of $50 is paid. The carrying cost per unit is $50 as well. If the unit cost is $250, the carrying rate is 20%, and the lead time is normally distributed with a mean of 0.02 year and variance of 0.0005 (year)^2.

a. Find the (s,Q) parameters if the service level is 99%.

b. Find the (s,Q) parameters if a stockout costs $110.

c. Find the (s,Q) parameters if the stockout probability should not be more than 5%.

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