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A product has an average weekly demand of 7 5 with an EOQ of 3 0 0 . The lead time is 2 weeks. The

A product has an average weekly demand of 75 with an EOQ of 300. The lead time is 2 weeks. The inventory holding cost is $2 per unit per week. The shortage cost is $18 per unit over the order cycle. The demand forecast error follows
(0,25^2) each week.
(a)(1 pt) What is the safety stock needed to mitigate the risk of high demand?
(b)(0.5 pts) It is proposed to reduce the lead time to 1 week. This will cost $50 per order cycle. Does the reduction in safety stock inventory cost per order cycle justify this cost?

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