Using the EOQ model, an inventory manager has established the economic order quantity in respect of an item with annual usage of 24,000 units on the average, to be equal to 4800 units, with a mean usage of 80 units per day. The lead time is known to be 5 working days. It is also known that the cost of carrying one unit of the item in safety stock is Rs 15 and the cost of being out-of-stock for this particular item is Rs 50 for each unit of the item. From the past records, the manager finds that the demand during lead time over the last 50 re-order periods has been as follows:

Help the manager to establish an appropriate level of safety stock and re-order level.

DDLT (units): Frequency: 250 300 350 400 450 1 3 6 18 4440 500 550 600 10 7 3 2