As a manager at Wal-Mart, you have just realized that the store frequently runs out of Nutella-spread jars. You are suspecting that there might be a problem with the replenishment policy. Thus, you have decided to gather more data.

The demand for Nutella turns out to be normally distributed. The mean demand for one week is 200 jars and the standard deviation for the weekly demand is 30 jars. Wal-Mart's purchasing cost for Nutella is $4 per jar. The cost of holding one Nutella jar in the inventory is $1 per week. In addition, the store incurs a cost of $25 for placing an order and it takes 2 weeks to receive the order.

Wal-Mart is using continuous time (Q,ROP) policy to replenish its Nutella jar inventory. Based on this, please answer the following questions. Please assume that 1 year = 52 weeks. (Please note that z-table is provided on page 2.)