Crew Soccer Shoes Company is considering a change of their current inventory control system for soccer shoes. The information regarding the shoes is given below.

Average demand = 200 pairs/week

Lead time = 3 weeks

Order cost = $65/order

Unit cost = $20

Carrying charge rate = 0.20

Desired service level = 95%

Standard deviation of weekly demand = 50

Number of weeks per year = 52

The company decides to use a fixed order quantity system. What is the economic order quantity? What should be the reorder point be to have a 95% service level? Explain how the system will operate.