Beauty and The Beatz (B&B) sells and installs car audio systems. The weekly demand for car audio systems follows a normal distribution with mean 70 systems per week and standard deviation 55 systems per week.? B&B reviews its inventory every 14 days. It takes 14 days to receive an order delivery? (assume 7 days per? week). B&B would like to maintain a service level of 95%.? B&B purchases the systems from a supplier for ?$150per system. Annual holding cost is 25% of the purchase cost per audio system. You may use the following table of values for the Standard Normal distribution to find your z value.
a) Compute the safety stock level you recommend for? B&B.
Safety stock? =
nothing
units ?(round your response to two decimal? places).
?b) Compute the appropriate reorder point.
Reorder Point? =
nothing
units
?(round your response to two decimal? places).
?c) Compute the annual holding cost for carrying the safety stock
?(round your response to nearest? dollar)