Question: Weekly demand for DVDs at a retailer is normally distributed with a mean of 1191 boxes and a standard deviation of 298 . Assume the

Weekly demand for DVDs at a retailer is normally distributed with a mean of 1191 boxes and a standard deviation of 298.

Assume the following data: There are 49 working weeks in a year. Lead time for delivery of an order is 4 weeks. The retailer takes ownership of the product only when the product reaches the store (i.e., the retailer is not responsible for pipeline inventory). Fixed cost (ordering and transportation) per order is $84. Each box of DVDs costs $5. Percent carrying cost is 14% of the unit value. The retailer currently orders 18747 DVDs when stock on hand reaches 5338.

(a) What is the annual ordering cost under the current policy?

(b) Based on the information given above, how many units of safety stock is the retailer currently holding?

(d) What is the current service level? Give your answer in percentage points and round to a whole number.

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