Inventory Management: 30 points total

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The annual demand for a specific brand of phone is 15,600 units. 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 carrying cost is $0.10 per unit.

1. How many phones should be ordered when the manager places an order? (10 points)

2. Find the reorder point necessary to provide a 98% service level. (10 points)

3. What is the safety stock? (5 points)

4. What is the inventory policy? (5 points)