1. Suppose Ollah decides to order 200 bags at a time. What would the total ordering and holding costs for the year be? (For this problem, don't consider safety stock when calculating holding costs.)
2. Average weekly demand for free-range dog biscuits is 80 bags per week, with a stan- dard deviation of 16 bags. Ollah uses a continuous inventory review system to manage inventory of the biscuits. Ollah wants to set the reorder point high enough that there is only a 5% percent chance of running out before the next order comes in. Assuming the lead time is a con- stant 2 weeks, what should the reorder point be?