CheapBuy is an electronics retail chain selling Gateway netbooks. The demand for theateway netbook LT$20$ at their local store is normally distributed with a mean of $120$CheapBuy is an electronics retail chain selling Gateway netbooks. The demand for the

Gateway netbook LT$20$ at their local store is normally distributed with a mean of $120$

netbooks$/$week and standard deviation of $10$ netbooks$/$week$.$ CheapBuy orders

netbooks from Gateway at unit cost of $$180.$ The annual cost of carrying inventory at

the store is $20\%$ of the purchase cost per unit per year. It takes $2$ weeks to receive a

delivery. The store reviews and places an order at the start of each week. The firm

wants to maintain a service level of $95\%.$

Given that the store uses the above periodic review inventory policy, which of the

following statement is FALSE?

$[$Note: Safety stock is rounded up to the nearest whole number. Regarding z values,

please find them in lecture slides.$]$

The lead time and review cycle are in total $3$ weeks.

The $z$ value associated with the $95\%$ service level is $1\mathrm{.}64.$

If the firm wishes to increase its service level, safety stock will increase as well.

The holding cost of safety stock is $$5220.$

Safety stock is $29$ netbooks.

netbooks$/$week and standard deviation of $10$ netbooks$/$week$.$ CheapBuy orders

netbooks from Gateway at unit cost of $$180.$ The annual cost of carrying inventory at

the store is $20\%$ of the purchase cost per unit per year. It takes $2$ weeks to receive a

delivery. The store reviews and places an order at the start of each week. The firm

wants to maintain a service level of $95\%.$

Given that the store uses the above periodic review inventory policy, which of the

following statement is FALSE?

$[$Note: Safety stock is rounded up to the nearest whole number.

The lead time and review cycle are in total $3$ weeks.

The $z$ value associated with the $95\%$ service level is $1\mathrm{.}64.$

If the firm wishes to increase its service level, safety stock will increase as well.

The holding cost of safety stock is $$5220.$

Safety stock is $29$ netbooks.