Problem $7-25($Static$)$

You manage inventory for your company and use a continuous review inventory system to control reordering items for stock. Your

company is open for business $300$ days per year. One of your most important items experiences demand of $20$ units per day, normally

distributed with a standard deviation of $3$ units per day. You experience a lead time on orders from your supplier of six days with a

standard deviation of two days. The unit price, regardless of order size, is $$4\mathrm{.}75.$ Your ordering cost is $$10.$ Your inventory carrying cost

is $20$ percent. You have established a service level policy of $97\mathrm{.}5$ percent on this item. Use Table $7-2.$

a$.$ What is your optimal order quantity? $($Round up your answer to the next whole number.$)$

Optimal order quantity

units

b$.$ What is your reorder point? $($Round your answer to the nearest whole number.$)$

Reorder point

units

c$.$ How much safety stock do you carry? $($Do not round intermediate calculations. Round up your answer to the next whole number.$)$

Safety stock

units

d$.$ What is your average inventory? $($Round your answer to the nearest whole number.$)$