Floyd Distributors, Inc., provides a variety of auto parts to small local garages. Floyd purchases parts from manufacturers according to the EOQ model and then ships the parts from a regional warehouse direct to its customers. For a particular type of muffler, Floyd's EOQ analysis recommends orders with Q* = 20 to satisfy an annual demand of 220 mufflers. Floyd's has 250 working days per year, and the lead time averages 15 days.

Note: Use Appendix B to identify the areas for the standard normal distribution.

What is the reorder point if Floyd assumes a constant demand rate? If required, round your answer up to the nearest whole number. r =_________

Suppose that an analysis of Floyd's muffler demand shows that the lead-time demand follows a normal probability distribution with = 11 and = 2.5. If Floyd's management can tolerate one stock-out per year, what is the revised reorder point? If required, round your answer up to the nearest whole number. r = ________

What is the safety stock for part (b.)? If Ch = $7/unit/year, what is the extra cost due to the uncertainty of demand? Safety Stock = _________units

Added Cost = $________ / year