A companyconsiders altering their inventory management system due to high costs. Currently, the company replenishes the item every Sunday with a fixed order quantity (EOQ). The cost of the item is 50 liras, and inventory holding rate is 40%/year. Cost of replenishment costs 300 lira/order and supplier delivers an order on the same day. Demand is normally distributed with mean 200/week and standard deviation of 60/day.

1)Find the order quantity, safety stock (90% CSL) and total annual cost for the system.a.459, 210, 37270b.559, 204, 25270c.559, 210, 27270d.350, 200, 370702

2)Suppose company wishes to reduce costs by implementing order up to S system but still they want to place an order every Sunday. Calculate S, safety stock and total annual cost.a.200, 102, 22680b.400, 204, 21970c.600, 154, 21000d.404, 204, 216803.

3)How can you reduce costs in Question(2) further? a.Reduce replenishment interval.b.CSL should be increasedc.Implementcontinuous review system (Q, R).d.Choose another supplier with a unit cost of 60 liras with still 40% of holding cost