Manufacturers (XM) is producing V-Neck shirts in three colors: red, blue, and white. The monthly demand for each color is 3,000 units (operating 20 days per month). Demand rate is fairly constant. Each shirt requires 0.5 pound of raw cotton that is imported from Porto Alegre-Textile (PA) Company in Brazil. The purchasing price per pound is $2.50 (paid only when the cotton arrives at XM's facilities) and transportation cost by sea is $0.20 per pound. The average traveling time from PA's facility in Brazil to XM's facility in the United States is two weeks and it has a standard deviation of 0.5 week. The cost of placing a cotton order, by XM, is $100 and the annual holding cost XM is facing is 20 percent. For the calculation of holding cost per unit, the base includes the purchasing price and transportation cost. The company requires a 96% service level in order to curtail stockouts