HighLife Corporation has the following information:

Average demand $=30$ units per day

Average lead time $=40$ days

Item unit cost $=$ $$45$ for orders of less than $400$ units

Item unit cost $=$ $$40$ for orders of $400$ units or more

Ordering cost $=$ $$50$

Inventory carrying cost $=15$ percent

The business year is $300$ days.

Standard deviation of demand during lead time $=90$

Desired service level $=95$ percent

What is the safety stock that HighLife Corporation should carry for its desired service level of $95$ percent?

$1\mathrm{.}28$ standard deviations cover $90$ percent

$1\mathrm{.}65$ standard deviations cover $95$ percent

$1\mathrm{.}96$ standard deviations cover $97\mathrm{.}5$ percent

Multiple Choice

$149$

$90$

$86$

$112$