Problem:
The average demand faced by a retailer in the past is 200 units/day with a standard deviation of daily demand of 15 units/day. The fixed cost to order is $1,000, and the product cost is $50 per units. The daily holding cost is 20% of the product cost. The lead time is 6 days.
Given that the retailer wishes to maintain a service level of 86%, calculate the:
(a) Safety Stock
(b) Re-order point
(c) EOQ
(d) Average inventory level
(e) Annual total inventory cost