2. ABC Inc. has collected the following information on one of its products:

Demand = 10,000 units/year

Standard deviation of weekly demand = 25 units

Ordering costs = $30/order

Holding costs = $4/unit/year

Cycle-service level = 95% (z for 95% = 1.65)

Lead-time = 2 weeks

Number of weeks per year = 50 weeks

a. If the firm uses the continuous review system to control the inventory, what would be the safety stock?

b. How much should be order quantity?