Question: *Please show all your work and formulas used* Consider the following question (see corresponding slide of the Transportation notes) . = Assume Fixed time period

*Please show all your work and formulas used**Please show all your work and formulas used*

Consider the following question (see corresponding slide of the Transportation notes) . = Assume Fixed time period model Review period = 1 week Product A has mean demand = 50/week and standard deviation of demand = 30/week 52 weeks/year Service level = 97.7% (z= 2) Cost of product A = $1000, and i = 20% (percent inventory carrying cost) Lead time (by sea freight) = 3 weeks Cost of sea freight included in $1000 cost of product . = . What is the amount of inventory, and the cost of holding inventory? Assume inventory is pipeline + cycle stock + safety stock Suppose air freight will reduce lead time to 1 week, but costs $20 extra per product. Should you use air freight? What if air freight costs $10 extra per product

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