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Question 3 A climbing rope manufacturer makes ropes for climbing equipment and sells them directly to the consumer via a storefront at the side of their manutacturing facilty. On an average day, they sell 20 climbing ropes. The standard deviation of this demand is 2 per day. The annual holding cost per unit is very inexpensive - it has been calculated to be just 55 per rope per year. Assume 365 days in a year. You manufacture ropes via production runs that are quite expensive. Each peoduction run costs $9.000 in setup costs. However, the ropes are wery tast to manutacture and the lead time per production run is 1 day no matser how many topes you choose to manufacture. The oost of goods per rope is 552 . Suppote the manufacturer uses a continuous review policy to manage their production and inventory, and they endeavor to have a service level of 90%. You may use the following table of z-values for reference. a. (6 points) What is the optimal reorder point? ROP=22.56 b. (3 points) What is the reorder quantity? Q=5,126.40 c. (4 points) What is the average inventory of ropes on hand? Avginvlevel=2565.76 d. (4 points) A layperson comes in and sees thousands of ropes in storage at this rope manulacturing facility. They're puzzled - surely it can't be elticient to have that much inventory! The owner of the shop responds. (Pick the response that best explains why they have so much inventory.) a. "Sure, there are a fot of ropes, but that's because we aim for a 90% service levell We need plenty on hand to make sure the customer is happy? b. "Sure, there are a lot of ropes, but that's because theyre cheap to store and Irs expensive to set up a production runt We need to be efficient when we make theser c. "Sure, there are a lot of ropes, but that's because they're inexpensivel We need plenty of inventory on hand to meet our sales quotas' d. "Sure, there are a lot of ropes, but that's because demand is so variable! We need plenty of inventory on hand to handle spkes in demand" Artwer A. e. (3 points) The rope company gets an opportunity to create climbing ropes for compettive courses. These ropes must be stored in very precise coils and humidity-controlled rooms to preserve their qualty. This increases the annual rope holding cost lo $100 per rope. Everything else is the same. What is the difference between the old order quantily and the new ordet quantity using these ropes costs