Problem $20-22($Algo$)$

Annual demand for a product is $10,920$ units; weekly demand is $210$ units with a standard deviation of $40$ units. The cost of placing an

order is $$155,$ and the time from ordering to receipt is four weeks. The annual inventory carrying cost is $$0\mathrm{.}70$ per unit.

a$.$ To provide a $90$ percent service probability, what must the reorder point be$?($Use Excel's NORMSINV$)$ function to find the correct

critical value for the given $-$level. Do not round intermediate calculations. Round $"z"$ value to $2$ decimal places and final answer to

the nearest whole number.$)$

Reorder point

units

b$.$ Suppose the production manager is told to reduce the safety stock of this item by $80$ units. If this is done, what will the new service

probability be$?($Use Excel's NORMSDIST$()$ function to find the correct probability for your computed Z$-$value. Round your answer to

the nearest whole number.$)$

Service probability