Read-time demand for a product is uncertain, and has the following probability distribution:
Lead-time demand 5 10 15 20 25 30
Probability 0.05 0.1 0.3 0.35 0.15 0.05
Suppose the desired service level is 0.95.
a. Find the reorder level and safety stock.
b. The inventory holding cost is $50/unit/year. What is the annual cost of carrying the safety stock?
Please show step by step solution to this problem