Consider the following information about a product for the next 3 parts of the question: Cost of placing an order = $100 Annual holding cost = $2 Average annual demand = 5,000 units Lead time demand = normally distributed with mean 20 and standard deviation 30 The order quantity is found as q = EOQ = 707 units. a. [4 pts.] Assume that all shortages are backordered where cost of backorder is = $12.41 per unit short. What is the reorder point (1) that minimizes expected cost? Answers b. [5 pts.] What reorder point (1) would meet 98% of all demand on time? Answers c. [5 pts.] What reorder point (1) would result in a stockout occurring during an average of 0.5 cycle per year? Answers