2. (10 points) The defect rate for a product has historically been about 2.0%. What are the upper and lower control chart limits if you wish to use a sample size of 64 and 3-sigma limits? 3. (10 points) A company begins a review of ordering policies for its continuous review system by checking the current policies for a sample of items. Following are the characteristics of the item: Demand = 500 units/month Ordering cost $240/order Holding cost $2/unit/year Lead time 2 months Standard deviation of monthly demand = 40 units Cycle-service level = 95% (Z=1.645)] a). What is the EOQ for this item? b). What is the required safety stock to meet the cycle-service level? c). What is the reorder point?