CC Rainger is a business to business distributor of MRO (maintain, repair and operate) products. They have more than 300 retail stores that they serve from a central warehouse. The company uses a 98% service level calculated on the proportion that can be satisfied directly from stock (demand fill rate). The cost for placing an order is $100 and the annual holding cost is 20%. They work 365 days/year.

Item property	Data value
Lead time from supplier	14 days
Lead time to Retailer	3 days
Internal price	$25
Daily demand	75 units
σ, Standard deviation during lead time	103 units
Inventory carrying cost	20 %

Tables that might be useful for answering the questions (click to open):

Normal Distribution function table
Service loss function table

1a. What is the Economic Order Quantity (EOQ)?

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 units unanswered

1b. What Safety Stock level does the company need to reach the desired service level?

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 units unanswered

1c. What Re-Order Point (ROP) level does the company need to reach the desired service level?

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