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LuxeLife store resells luxury items, the demand for which is normally distributed. The inventory related information at the LuxeLife store is as follows: Average Annual

LuxeLife store resells luxury items, the demand for which is normally distributed. The inventory related information at the LuxeLife store is as follows:
Average Annual Demand =400 luxury items
Standard deviation of weekly demand =2 items
Item Cost = $4,000 per item
Ordering cost = $2,500 per order
Lead time =10 weeks
Annual inventory-holding cost estimate =1.25% of the item cost
Required service level =90%
LuxeLife works 50 weeks a year.
Note: The approximate z values are: for 0.91.28, for 0.921.405, for 0.951.645, for 0.982.05.
Suppose the store management practices the fixed-QUANTITY ordering system with the use of the economic order quantity. Answer the following questions:
(i) How many luxury items they order each time?
(ii) When do they place an order?
(iii) What is the safety stock?
Select one:
a.
(i) they order 200 luxury items
(ii) an order is placed when the inventory in stock reaches about 80 items
(iii) the safety stock is 8 items
b.
(i) they order 288 luxury items
(ii) an order is placed every 2 weeks
(iii) the safety stock is 88 items
c.
(i) they order 200 luxury items
(ii) an order is placed every 4 weeks
(iii) the safety stock is 128 items
d.
(i) they order 280 luxury items
(ii) an order is placed every 10 weeks
(iii) the safety stock is 80 items
e.
(i) they order 200 luxury items
(ii) an order is placed when the inventory in stock reaches about 88 items
(iii) the safety stock is 8 items

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