nventory Item

Average Demand $($Annual$)$

Sigma $($Std$.$ Dev.$)$ of Demand During Lead Time

Item Unit Cost

F$-11001$

$15,000$

$100$

$$250\mathrm{.}00$

K$-12002$

$100,000$

$300$

$$2\mathrm{.}00$

L$-13003$

$250,000$

$200$

$$0\mathrm{.}20$

N$-14004$

$300,000$

$400$

$$1\mathrm{.}00$

P$-21001$

$50,000$

$60$

$$125\mathrm{.}00$

S$-22002$

$80,000$

$75$

$$30\mathrm{.}00$

Calculate the safety stock quantities and the inventory cost associated with safety stock $($based on the item unit cost$)$ for the inventory items at four different service levels $(50\%,80\%,90\%,$ and $95\%).$

Develop a table to present the inventory quantities and the safety stock costs at each service level.

Assuming that demand occurs at a steady pace every month $($in other words, there is no seasonality or cyclical change in the level of demand$),$ calculate the reorder point for each item assuming a lead time of two months and a service level of $90\%.$

Develop a table to present the reorder points for all products under these conditions $($two month lead time and service level of $90\%).$