-'I The Tatung Company distributes awide range of electrical products. One of its best-selling items is a standard electric motor.The management of Tatung Company uses the economic-orderquantity (EOQ) decision model to determine the optimum number of motors to order. Management now wants to determine how much safety stock to hold. Tatung company estimates annual demand (300 working days) to be 300,000 electric motors. Using the EOQ decision model, the company orders 30,000 motors at a time. The lead time for an order is five days. The annual carrying costs of one motor in safety stock are $10. Management has also estimated that the stockout costs rate $20 for each motor they are short. Tatung Company has analyzed the demand during 200 past reorder periods. The record indicate the following patterns Demand during Number of Times Lead Time Quantity Was Demanded 4,400 6 4,600 12 4,800 16 5,000 130 5,200 20 5,400 10 5,600 g Q Required: 1. Determine the level of safety stock for electric motors that Tatung Company should maintain in order to minimize expected stockout costs and carrying costs. When com-puting carrying costs, assume that the safety stock is on hand at all times and that there is no overstocking caused by decreases in expected demand. (Consider safety stock levels of 0, 200, 400, and 600 units.) What would be Tatung Company's new reorder point '? What factors should Tatung Company have considered in estimating the stockout costs? 5".\