The inventory manager of sales and distribution for Toffee Inc., a confectionery company, had just concluded a meeting with all relevant personnel. The meeting had not been entirely positive. The words of the production manager still echoed in his ears: "If the ingredient inventory is not re-examined and reworked to the firm's advantage then [soon] the final products based on these ingredients will cease to yield the kind of profits that the firm expects." The inventory manager needed to create acomprehensive forecasting and inventory management plan with a view to minimize the cost of managing the supply chain by judicious use of resources, better forecasting, and improvement in the ingredient inventory purchasing and management systems.

Please read the Toffee, Inc Case and Answer the following questions:

What is the safety stock to be maintained by the sales and distribution division for a service level of 95 percent? What are the replenishment triggers (re-order level) for the sales and distribution division with the given lead time and expected service levels? What is the most economic order quantity for the sales and distribution division? Compute the number of orders per year and the order cycle as well. What is the total annual inventory cost?