A health and nutrition store stocks a multivitamin with an annual demand of 1,000 bottles has

C_o = $23.50

and

C_h = $9.

The demand exhibits some variability such that the lead-time demand follows a normal probability distribution with

= 25

and

= 5.

(a)

What is the recommended order quantity? (Round your answer to the nearest integer.)

(b)

What are the reorder point and safety stock if the store desires at most a 4% probability of stock-out on any given order cycle? (Round your answers to the nearest integer.)

reorder point

safety stock

(c)

If a manager sets the reorder point at 30, what is the probability of a stock-out on any given order cycle? (Round your answer to four decimal places.)

How many times would you expect a stock-out during the year if this reorder point were used? (Round your answer to the nearest integer.)