It is your responsibility, as the new head of the automotive section of Nichols Department Store, to ensure that reorder quantities for the various items have been correctly established. You decide to test one item and choose Michelin tires, XW size 185 14 BSW. A perpetual inventory system has been used, so you examine this, as well as other records, and come up with the following data:

Cost per tire	$	35	each
Holding cost		25	percent of tire cost per year
Demand		1,260	per year
Ordering cost	$	36	per order
Standard deviation of daily demand		3	tires
Delivery lead time		4	days

Because customers generally do not wait for tires but go elsewhere, you decide on a service probability of 99 percent. Assume the demand occurs 365 days per year.

a.Determine the order quantity

Order Quantity

b. Determine the reorder point. (Use Excel's NORMSINV() function to find the correct critical value for the given -level. Do not round intermediate calculations. Round "z" value to 2 decimal places and final answer to the nearest whole number.)

Reorder Point