Arms of Steel is an organization that sells weight training sets. The carrying cost for the AS1 model is 20% per set per year. The unit price is $75. To meet demand, Arms of Steel orders large quantities of AS1 five times a year. The stockout cost for AS1 is estimated to be $25 per set. Over the past several years, Arms of Steel has observed thedemand during the lead time for AS1 as listed in the table below. The reorder point for AS1 is 60 units.

a. What level of safety stock should be maintained for the AS1 model?

b. What is the amount of safety stocks?

DDLT Probability

50 0.1

60 0.3

70 0.3

80 0.2

90 0.1