Petromax Enterprises uses a continuous review inventory control system for one of its SKUs. The following information is available on the item. The firm operates 50 weeks in a year.. Demand - 50,000 units/year, Ordering cost = $35/order, Holding cost= $2/unit/year, Average lead time = 3 weeks, Std Deviation of weekly demand = 125 units.
If Petromax wants to provide a 95 percent cycle-service level, what should be the safety stock and the reorder point?