Problem $20-30($Algo$)$

It is your responsibility, as the new head of the automotive section of Nichols Department Store, to ensure that reorder quantities for

the various items have been correctly established. You decide to test one item and choose Michelin tires, XW size $18514$ BSW$.$ A

perpetual inventory system has been used, so you examine this, as well as other records, and come up with the following data:

Cost per tire $ $45$ each

Holding cost $,30$ percent of tire cost per year

Demand

$1,080$ per year

Ordering cost $$28$ per order

Standard deviation of daily demand $4$ tires

Delivery lead time $5$ days

Because customers generally do not wait for tires but go elsewhere, you decide on a service probability of $99$ percent. Assume the

demand occurs $365$ days per year.

a$.$ Determine the order quantity. $($Round your answer to the nearest whole number.$)$

b$.$ Determine the reorder point. $($Use Excel's NORMSINV$)$ function to find the correct critical value for the given $a-$level. Do not

round intermediate calculations. Round $"z"$ value to $2$ decimal places and final answer to the nearest whole number.$)$