Safety inventory Preclass assignment 2 1. Weekly demand for Tide laundry detergent at Lexington Laundrymat is normally distributed with a mean of 2500 and a standard deviation of 500. The replenishment lead time is two weeks and the store manager has decided to review inventory every four weeks. Assuming a periodic review replenishment policy, evaluate the safety inventory that the store should carry to achieve a CSL of 90 percent. Evaluate the OUL for such a policy. Show all your work including formulas. 2. Explain how the flexibility for a buyer to place orders impacts safety inventory. 3. Select increase or decrease for each of the five aggregation conditions below. a) The safety inventory savings on aggregation decrease/increase with the desired cycle service level CSL. b) The safety inventory savings on aggregation decrease/increase with the replenishment lead time L. c) The safety inventory savings on aggregation decrease/increase with the holding cost H. d) The safety inventory savings on aggregation decrease/ increase with the coefficient of variation of (D/D) demand. e) The safety inventory savings on aggregation decrease/increase as the correlation coefficients increase.