A distributor of large appliances needs to determine the order quantities and reorder points for the various products it carries. The following data refer to a specific refrigerator in its product line:

Cost to place an order

$

50

Holding cost

25

percent of product cost per year

Cost of refrigerator

$

460

each

Annual demand

580

refrigerators

Standard deviation during lead time

48

refrigerators

Lead time

10

days

b.

If the distributor wants a 99 percent service probability, what reorder point, R, should be used? (Use Excel's NORMSINV() function to find the correct critical value for the given -level. Do not round intermediate calculations. Round "z" value to 2 decimal places and final answer to the nearest whole number.)

Reorder point

refrigerators