Question: QUESTION 1 Daily demand for an air-conditioning split unit is normally distributed with a mean of 60 and standard deviation of 7. The source of

QUESTION 1 Daily demand for an air-conditioning

QUESTION 1 Daily demand for an air-conditioning split unit is normally distributed with a mean of 60 and standard deviation of 7. The source of supply is reliable and maintains a constant lead time of six days once the inventory replenishment is ordered by a Fixed Order Quantity Method. The cost of placing the order is AED 1000 and annual holding costs are AED 100 per unit. There are no stockout costs, and unfilled orders are filled as soon as the order arrives. Assume sales occur over the entire 365 days of the year. (a) Compue the following values to satisfy a 95 percent probability of not stocking out during the lead time. The order quantity units . The reorder point units units (b) Safety stock to meet the 95% service level requirements Note: Please type in only your final numerical answer in the blanks

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