The average lead time for delivery of a raw material used by the Nell Company is 10 days. The average use of the material is 18 units per day. The carrying cost per unit of average inventory is \(\$ 10\) per year. The following information is available through an analysis of the company's accounting records:

The optimum number of orders is 10 per year. The stockout cost is \(\$ 20\) per unit. The manager is considering whether to carry a safety stock of \(0,10,15\), or 20 units.
{Required:}
(1) Determine the level of safety stock that should be carried assuming the pattern of usage during lead time will remain the same as before.
(2) Determine the reorder point.

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Usages During Lead Time Probability of the Usage .05 150 units 160 units .10 170 units .20 180 units .30 190 units .20 200 units .15 1.00