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:

Because customers generally do not wait for tires but go elsewhere, you decide on a service probability of $98$ percent. Assume the demand occurs $365$ days per year.

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

Order quantity

tires

b$.$ Determine the reorder point. $($Use Excel's NORMSINV$0$ functlon to find the correct critical value for the glven $-$level. Do not

Reorder point

tires