(2) Ignore your answer in (1). Assume lead-time (L) = 3 weeks. Use the relevant information to answer the following questions pertaining to Model AB. (12 pts)

a. What is the safety stock level needed to achieve 99% service level? What would the target inventory level (=d*(T+L) + Safety stock) be?

b. Assume the managers want to keep the annual average inventory carrying cost below $500,000. What is the implied service level associated with this cost? (carrying rate = .25)

Exhibit 14.15 DeskJet Demand Data from Europe Europe Nov. Dec. Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Options A 80 60 90 21 48 9 20 54 84 42 AB 20,572 20,895 19,252 11,052 19,864 20,316 13,336 10,578 6,095 14,496 23,712 9,792 AU 4,564 3,207 7,485 4,908 5,295 90 5,004 4,385 5,103 4,302 6,153 AA 400 255 408 645 210 87 432 816 430 630 456 273 AQ 4,008 2,196 4,761 1,953 1,008 2,358 1,676 540 2,310 2,046 1,797 2,961 AY 248 450 378 306 219 204 248 484 164 363 384 234 Total 29,872 27,003 32,344 18,954 26,617 23, 103 15,692 17,431 13,404 22,692 30,735 19,455