Question: Monthly demand for an inventory item is a normally distributed random variable with a mean of 20 units and with a standard deviation of 2.

Monthly demand for an inventory item is a

Monthly demand for an inventory item is a normally distributed random variable with a mean of 20 units and with a standard deviation of 2. Demand follows this distribution every month, 12 months a year. When inventory reaches a predetermined level, an order for replenishment is placed. The fixed ordering cost is $60 per order. The items cost $4 per unit, and the annual inventory holding cost is 25 percent of the average value of the inventory. The replenishment lead time is exactly 4 months. Part A: [10 points] Determine the EOQ. Part B: [10 points] Assume that a 10 percent all units" discount will be given if the order quantity is greater than or equal to 100 units. What order quantity would you recommend with this offer? Part C: [10 points] Determine the necessary reorder point and safety stock to achieve a 90 percent service level

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