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A cell phone manufacturer is preparing its inventory and production schedule. A key element is installing a SIM card into each phone. Demand has been

A cell phone manufacturer is preparing its inventory and production schedule. A key element is installing a SIM card into each phone. Demand has been averaging 238 cards per week. Holding costs are $0.03 per card per week, and reorder costs are estimated at $12 per order.

The manufacturer does not want to be out of stock on more than 1% of their orders. There is a one-day delivery time. The standard deviation of demand is six cards per day. Assume a normal distribution of demand during lead time and a seven-day work week. What is the average amount of safety stock for the reorder point?

A) 10

B) 12

C) 14

D) 16

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