3 We are given the following information for a product:

Order cost  $50 Annual demand  N(960, 3,072.49)

Annual holding cost  $6/item/year Shortage cost  $80 per unit Lead time  one month Sales price  $40 per unit Product cost  $30 per unit a Determine the order quantity and the reorder point under the assumption that all demands are backordered.

b Determine the order quantity and reorder point under the lost sales assumption.