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A part is demanded at the rate of 470 per week. The part is purchased from a supplier in Asia, and the lead time is

A part is demanded at the rate of 470 per week. The part is purchased from a supplier in Asia, and the lead time is 8 weeks. The standard deviation of demand during the lead time is 26 units. If the company wants to have a service level of 95%, how much safety stock should the company hold for this part? If the opportunity cost of capital for the company is estimated to be 25% and the part cost $100, what is the annualized cost of the safety stock required to achieve the desired service level?

Standard Normal Table

Service level

z value

0.90

1.28

0.95

1.65

0.975

1.96

0.98

2.05

0.99

2.33

The safety stock is _____enter your response here

units. (Enter your response rounded up to the next whole number.)

The annualized cost of safety stock is______enter your response here.

(Enter your response rounded to the nearest dollar.)

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