Problem 3. (20 points) Weekly demand for DVDs at a retailer is normally distributed with a mean of 1000 boxes and a standard deviation of 150. The store orders its DVDs from a supplier at a price of $2 per box. Accounting for ordering and transportation costs, each order costs the store $100 and takes 2 weeks to arrive. The store's annual inventory carrying rate is 25%. Assume 50 weeks in a year for simplicity. Answer the following questions. Show your work to receive full credits. 1. (10 points) Specify the inventory policy the retailer should use to achieve a service level of 90% at minimum cost. 2. (6 points) Under the recommended inventory policy from part 1, what are the average ordering, holding, and purchasing costs per year