Motorola obtains cell phones from its contract manufacturer located in China to serve the U.S. market. The U.S. market is served from a warehouse located in Memphis, Tennessee. Daily demand at the Memphis warehouse is normally distributed, with a mean of 5,000 and a standard deviation of 4,000. The warehouse aims for a CSL of 99 percent. The company is debating whether to use sea or air transportation from China. Sea transportation results in a lead time of 36 days and costs $0.50 per phone. Air transportation results in a lead time of 4 days and costs $1.50 per phone. Each phone costs $100, and Motorola uses an annual inventory holding ratio of 20 percent. Assume that Motorola follows a continuous review policy. Given the minimum lot sizes, Motorola would order 100,000 phones at a time if using sea transport and 5,000 phone at a time if using air transport. a) What reorder point and safety inventory should the warehouse aim for when using sea or air transportation? (4 pts) b) What is the total annual inventory cost when using sea or air transportation? (5 pts) (Hint 1: total annual inventory cost = annual inventory carrying cost + annual transportation cost) (Hint 2: average inventory level = cycle inventory + safety inventory) (Hint 3: cycle inventory = lot size/2) Assume that Motorola follows a periodic review policy. Given lot sizes by sea and air, Motorola would have to place an order every 20 days using sea transport but could order daily using air transport. c) What order-up-to level and safety inventory should the warehouse aim for when using sea or air transportation? (4 pts) d) What is the total annual inventory cost when using sea or air transportation? (5 pts) (Hint 1: total annual inventory cost = annual inventory carrying cost + annual transportation cost) (Hint 2: average inventory level = cycle inventory + safety inventory) (Hint 3: cycle inventory = average lot size/2) (Hint 4: average lot size = average cycle demand = TD) e) Write a memo to the upper manager and summarize your findings. Which inventory policy and transportation mode do you recommend? Explain to the upper manager about the pros and cons of the two types of inventory policies? The memo should not exceed page