Question: Variable Demand - Given this information: Average weekly demand =100 units. Standard deviation =10 units. Lead time =4 weeks. Acceptable stockout risk =2.5% Ordering cost

Variable Demand - Given this information: Average weekly demand =100 units. Standard deviation =10 units. Lead time =4 weeks. Acceptable stockout risk =2.5% Ordering cost =$30 Annual Holding cost =20% Unit cost (purchase price) =$40 The company operates =50 weeks a year. Weekly usage rates are distributed normally. Determine each of the following, assuming that lead time demand is distributed normally: a. Order quantity (EOQ). Note: h= annual percentage " unit cost b. The safety stock needed to attain a 2.5 percent risk of stockout during lead time. c. The reorder point (ROP) that will provide a risk of stockout of 2.5 percent during lead time

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