PLEASE SOLVE ASAP. FIRST HALF ALREADY DONE AND ANSWERS GIVEN BELOW TO HELP DO PART TWO.

Inventory management question: The Beanery in boston is open 365 days a year and sells an average of 120 pounds of Kona Coffee beans a day (Assume demand is to normally distributed with a standard deviation of 40 pounds/day). Beans are ordered from Hawaii, and will arrive in exactly 4 days with a flat rate shipping and handling charge of $150. Per-pound annual holding costs for the beans are $3. Coffee is highly profitable, so the Beanery would like to have at most a 1% chance of running out of beans. Orders should be placed in whole pounds, but otherwise the Kona suppliers can deal with orders of any size. .

Calculate the economic order quantity (EOQ) for Kona coffee beans __2,093______lbs

Calculate the total annual holding costs of cycle stock for Kona coffee beans $_____$3,139.50__

Calculate the total annual fixed ordering costs for Kona coffee beans $________3,150__

Calculate the Re-Order Point ____666___lbs

PLEASE SOLVE BELOW .

1) If management specified that a 2% stock-out risk is now okay, would safety stock holding costs decrease, increase, remain unchanged or do we not have enough info to tell?

2) Now assume that Kona supplier wants to place the Beanery on a fixed order intervals, where they will only deal with orders every 3 weeks (Hawaiians have better things to do than be waiting by the phone for obnoxious Manhattanites). Assume all other parameters remain the same. If the Beanery has only 350lbs of beans left on the day they are allowed to place an order, calculate the probability they will run out before this next order arrives. ________%

3)Compare the cost of safety stock for the Fixed Order interval to that associated with the reorder point. How does it differ and why?