Palin's Muffler Shop has one standard muffler that fits a large variety of cars. The shop wishes to establish a periodic review system to manage inventory of this standard muffler. Use the information in the following table to determine the optimal inventory target level (or order-up-to level). Annual demand Standard deviation of daily demand Item cost Annual holding cost Review period Optimal target level 2,850 6 $30.00 40 16 Increase O Decrease mufflers mufflers per working day per muffler % of item value working days b. If the service probability requirement is 97 percent, the optimal target level will: Stay the same Ordering cost Service probability Lead time Working days $ 55 a. What is the optimal target level (order-up-to level)? (Use Excel's NORMSINV() function to find the correct critical value for the given a-level. Do not round intermediate calculations. Round "z" value to 2 decimal places and final answer to the nearest whole number.) per order working days per year 91 % 4 285

Palin's Muffler Shop has one standard muffler that fits a large variety of cars. The shop wishes to establish a periodic review system to manage imventory of this stondard muffier. Use the information in the following tabie to determine the optimat inventory target level tor order-up-to level). a. What is the optimal target level (order-up-to level)? (Use Excel's NORMSINv0 function to find the correct critical value for the given a-level. Do not round intermediate calculations. Round " 2 " value to 2 decimal places and final answer to the nearest whole number) b. If the service probability requirement is 97 percent, the optimal target level will: Increase Decrease Stay the same