Target continuously reviews its inventory levels for study desks. For one particular popular brand, it currently buys 200 on each order. Demand is 5,200 per year (100 per week) with a standard deviation of 60 per week. The supplier has a 4-week lead time and it costs $225 per desk for Target to purchase these study desks. The ordering cost is $80 and holding costs are based on a 20% annual interest rate. You can assume that Target owns the chairs when they are delivered and the desired service level is 95%.

A. Target wants to reduce the reorder point for this study desk. If the Lead time drops down to 2.5 weeks, what will be the reorder point?

B. They found out that lad time is not easy to reduce - so it stays at 4 weeks. Now, they are reducing service level down to 90%. They also worked on their forecasting, and the standard deviation of demand per week goes down to 40 desks per week. What will be the reorder point?