Each unit of an item costs a company 20 with annual holding costs of 12 per cent of unit cost for interest charges, 1 per cent for insurance, 2 per cent allowance for obsolescence, 2 for building overheads, 1.50 for damage and loss and 4 miscellaneous costs. If the annual demand for the item is constant at 2,000 units and each order costs 800 to place, calculate the economic order quantity and the total cost of stocking the item. A retailer guarantees a 95 per cent service level for all stock items. Stock is delivered from a wholesaler who has a fixed lead time of 4 weeks. What reorder level should the retailer use for an item that has Normally distributed demand with mean 50 units a week and standard deviation of 20 units? What is the reorder level with a 98 per cent service level