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(2) times a year. The reorder point without safety stock is 40 units. The holding cost is R120 per unit per year, and the

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(2) times a year. The reorder point without safety stock is 40 units. The holding cost is R120 per unit per year, and the cost of a stockout is R160 per unit. Below are the demand probabilities during the reorder period: 11 EPT2602/103/0/2024 Demand during reorder period Probability 0 0.05 20 0.15 40 0.25 60 0.20 80 0.20 100 0.15 5.1.1 Calculate the amount of safety stock the company needs to carry to minimise total costs (holding + stockout). Show full calculations. (10)

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