One of the most-often sold items at a grocery store is bread. The daily demand for bread at a local grocery store is 4,000 loafs that sell for $2 each. The standard deviation in demand is 1,000 bags daily, and the holding costs can be estimated at 5% per day (i.e., some cost of having to throw out loafs of bread that have passed their sell-by date). The cost for an order is $200 paid to the baker (who needs two days to deliver a new batch). Determine the reorder point for a 97.5% service level.

Group of answer choices

Approximately 2,770

Approximately 8,000

Approximately 11,920

Approximately 10,770

can you show how to do this step by step?