Process Analysis A new process cost $100,000 to implement and increases, transportation and ordering cost by $4 per unit; thus costing $ 308,400 per year. Assume that the business operated 5 days-a- week, 52 weeks-a-year, except for 3-days (Christmas, Thanksgiving, 4 of July). Given the information in the table below, determine whether it would be better to stick with the old process or switch to the new process (hint: calculate financial impact of back-orders, calculate the safety stock for both options calculate the safety stock cost reduction). Old Process New Process Cumulative Distribution Z Average Order Cycle Time 10 5 0.75 0.67449 Std. Dev of OCT 2 1 0.8 0.84162 Number of orders (Demand per day) 300 300 Service Level (Order fill rate) Pretax profit per order 90.00% 95.00% $250.00 $246.00 0.85 1.03643 0.9 1.28155 0.925 1.43953 Stock-out resulting in backorders 75% 75% 0.95 1.64485 Stock-outs resulting in lost sale Cost per backorder 25% 25% 0.975 1.95996 $175.00 $175.00 0.99 2.32635 Invoice deduction per backorder $25.00 $25.00 0.999 3.09023 Inventory carrying cost rate 0.30 0.30 0.9999 3.71902 Cost per unit $500.00 $504.00 Assume inventory carrying rate is the same for both options