Your firm uses a continuous review system and operates 52 weeks per year. One of the Stock-Keeping Units (SKUs) has the following characteristics:
Demand = 20000 units/year = 385 units/week
Ordering cost = $40/order
Holding cost = $2/unit/year
Service level = 95 percent			z=1.65
Lead time = 2 weeks
Demand is normally distributed, with a standard deviation of weekly demand of 100 units.
a)	Calculate the item's EOQ. (2 marks)
b)	Find the safety stock and reorder point that provide a 95 percent service level. (5 marks)
c)	For these policies, what are the annual costs of (i) holding the cycle inventory and (ii) placing orders? (3 marks)