"Artists' Advantage" sells painting supplies. 2080 units of the most basic brush for watercolors, the T100, are sold a year. The order cost is $30 per order, and the holding cost is $3.00 per box. The lead time for an order is 3 weeks, and the standard deviation of demand is 6 boxes per week.

1. What is the optimal order quantity of brushes? EOQ=sqrt (2*D*S/H)=sqrt (2*2080*$30/$3)=203.9608, So the optimal order quantity round to 204.
2. What is the optimal number of orders per year? 2080/204=10.19, round to 10 orders.
3. Compute the period that most closely matches this EOQ. Dt=2080/52 week=40 per week, period=EOQ/Dt=203.9608/40=5.09902, rounded to 5 weeks.
4. What value of z should be used if A1 wishes to achieve a cycle-service level of 98 percent? 98% percent cycle-service level is close to 0.9803 which is 2.06, and the other is close to 0.9798 which is 2.05, Z=(2.05+2.06)/2=2.055
5. Using the period from question 3, compute the target inventory level T. How much safety stock of brushes does this provide? How does this compare to the safety stock if a continuous review system is used? Target inventory level T=40 brush per week *(3+5)+2.055*6*sqrt(5+3)=354.8745, round to 355. safety stock in Periodic system is 2.055*sqrt(5+3)*6=35.08967, round to 36 . Reorder point in Continuous review system is 40 brush per week+2.055*3*6=76.99, round to 77. safety stock in continuous review system is =2.055*sqrt(3)*6=21.356, round to 22. Please advise If I am correct. thank you!