please note re-order lead time is 8 weeks and the demand is 1,500 reels per month.

You are a distributor of steel cables that are used in many different kinds of construction applications. For a particular type of cable, you stock this product in reels of either 2,000 feet or 5,000 feet. (NOTE: for this exercise assume that 1 month - 4 weeks.) 1. Your demand for the 5,000-foot reels is 1,500 reels per month. The standard deviation of demand is 300 reels per month. Reorder lead-time is 8 weeks. How much safety stock do you need to achieve a service level of 90%? 2. What is the reorder point for this level of service? 3. a You are able to locate a new supplier who can deliver in 3 weeks. What would your reorder point be with a 3-week lead-time for a 90% service level? Assume that your lead-time continues at 8 weeks as in "1" and "2" above. You wish to raise your service level to 958. How much additional safety stock will you need to carry? 5. If the cost of each reel is $300, how much additional cash will be tied up in safety stock to make this change? 6. Assume that you pay for this additional inventory by drawing on a line of credit. If the interest rate on this credit line is 6.5% per annum, and you carry this balance for one year, how much additional interest expense will you have incurred due to this increase in safety stock? 7. What other concerns/issues do you need to take into consideration in order to decide whether or not to make this investment