Question: Please help and explain this question 1. Suppose Eddie Bauer does move production of wholesale bags to Turkey. Let's say it can place orders with

Please help and explain this question

1. Suppose Eddie Bauer does move production of wholesale bags to Turkey. Let's say it can place orders with its Turkish supplier every four weeks; that is, one period equals four weeks. Its lead time is two periods; that is, L = 2. The average demand for one type of wholesale bag is 200 bags per period (i.e., they sell, on average, 200 bags every four weeks), with a standard deviation of 100 bags. The holding cost for each bag each period is $1.00, and it would operate with a 2.5 safety factor. How much inventory on average, would it have on order and on hand? What would be the inventory holding cost per bag?

Component Cost	Tacoma	Turkey	Notes:
Hourly Wage	$13.25	$2.25	Includes fringes
Labor Content	49 minutes	63 minutes
Materials	$13	$13
Other Mfg Expenses	$1.50	$/0.75	Incl. Insurance, maintenance, warranty, theft losses
Shipment to Tacoma	$0	$1	Ocean Container shipment. Airfreight is $14 per bag
Shipment from Tacoma to customers	$3	$3

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