At its Crested Butte popup store New Balance (NB) is selling a steady number of Elk Run trucker hats. The inventory manager says, "I try to keep almost a two month supply in stock. When my inventory drops below that level I order another two month supply. I have been using this method for years, and it works." The trucker hats cost $8 each and sell for $25 each. The cost of processing an order and receiving new hats amounts to $80. Monthly demand is approxima normally distributed with mean 120 and standard deviation 60. Assume a 15% annual interest rate. 1. What order quantity Q is NB currently using to control the inventory of trucker hats? 2. What reorder point R is NB currently using to control the inventory of trucker hats? 3. What is the current Type I service level? 4. What is the current Type II service level? 5. What order quantity Q would you recommend for NB? 6. How would you set the reorder point R so as to have a Type I service level of 99%? 7. How would you set the reorder point R so as to have a Type II service level of 99%? At its Crested Butte popup store New Balance (NB) is selling a steady number of Elk Run trucker hats. The inventory manager says, "I try to keep almost a two month supply in stock. When my inventory drops below that level I order another two month supply. I have been using this method for years, and it works." The trucker hats cost $8 each and sell for $25 each. The cost of processing an order and receiving new hats amounts to $80. Monthly demand is approxima normally distributed with mean 120 and standard deviation 60. Assume a 15% annual interest rate. 1. What order quantity Q is NB currently using to control the inventory of trucker hats? 2. What reorder point R is NB currently using to control the inventory of trucker hats? 3. What is the current Type I service level? 4. What is the current Type II service level? 5. What order quantity Q would you recommend for NB? 6. How would you set the reorder point R so as to have a Type I service level of 99%? 7. How would you set the reorder point R so as to have a Type II service level of 99%