Daily demand for HP printers at a Costco regional distribution center (RDC) is normally distributed with mean 585 and standard deviation 120. The store manager continuously monitors inventory and places orders. The lead time from HP to the Costco RDC is normally distributed with a mean of 8 days and a standard deviation of 2 days.

1. How much safety stock should Costco carry if it wants to provide an in-stock probability of 0.99?

1. How much would the safety stock level change if Costco were to consider an in-stock probability of 0.98 instead?

1. Assuming an in-stock probability of 0.99, if each printer is valued at $149 and Costco's holding cost is 18% per year, what is Costco's cost of holding safety stock for this HP printer?

1. Assuming and in-stock probability of 0.99, how does the required safety stock and holding cost change as the standard deviation of lead time from HP to Costco is reduced from 4 days to zero in increments of 1 day?