Fiber Technology, Inc., manufactures glass fibers used in the communications industry. The company's materials and parts manager is currently revising the inventory policy for XL-20, one of the chemicals used in the production process. The chemical is purchased in 10-pound canisters for $113 each. The firm uses 6,600 canisters per year. The controller estimates that it costs $168 to place and receive a typical order of XL-20. The annual cost of storing XL-20 is $5.80 per canister. Now also assume that the lead time required to receive an order of XL-20 is one month.

a. Suppose that monthly usage of XL-20 fluctuates between 450 and 650 canisters, although annual demand remains constant at 6,600 canisters. What level of safety stock should the materials and parts manager keep on hand for XL-20? What is the new reorder point for the chemical? (Round your answer to nearest whole number.)

b. Assuming stable usage of XL