Question: The annual demand for a specific product is 3 , 5 0 0 units and has the following ordering and holding costs: Co = $

The annual demand for a specific product is 3,500 units and has the following ordering and holding costs: Co = $20.50 per order and Ch = $8.00 per unit. Demand exhibits some variability such that the lead-time demand follows a normal probability distribution with =45 units and =12 units.What is the recommended order quantity for this product? If the manager sets the reorder point at 55 units, what is the probability of a stockout in any given order cycle? Express your answer as a decimal to 4 decimal places using standard rounding rules. Given the probability of a stockout in problem 2b, how many times would expect a stockout to occur during the year if the reorder point =55 units were used? Express your answer to 2 decimal places using standard rounding rules. Using the information in Problem 2, assume that the company wants at most a 2% probability of a stockout during any given order cycle. Answer the following questions:
Problem 2d.(2.5 points) What is the Z-value if the company wants at most a 2% probability of a stockout? Express your answer to 2 decimal places using standard rounding rules. What is the reorder point if the company wants at most a 2% probability of a stockout? Express your answers as a whole number using standard rules.

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