Q2. Karakoy Bakery buys chocolate chips from Beyoglu Chocolates. Delivery of chips takes 4 weeks. Beyoglu Chocolates sells chocolate chips at $2 per kilogram. Fixed cost of ordering is $100 and holding costs are based on a 10% annual interest rate. Karak'oy Bakery estimates that the loss of customer goodwill for running out of chocolate chips is $20. The weekly demand for chocolate chips is normally distributed with mean 10 kg and standard deviation 2 kg. Assume that there are 52 weeks in a year and that all excess demand is back-ordered. a} Suppose that the expected annual demand can be considered as known; what is the EOQ? b) What is the reorder level to maintain a 99% Type 1 service objective with the E00 as the order quantity? c] What is the reorder level to maintain a 99.9% Type 2 service objective with the EDQ as the order quantity? d) How large an order should Karakoy Bakery place with Beyoglu chocolates for chocolate chips, and when should those orders be placed to minimize the average total holding, setup and shortage costs of chocolate chips supply? What is the corresponding annual cost for chocolate chips supply? e} What level of Type 1 service is being provided by the policy obtained in part d? 1'} What level of Type 2 service is being provided by the policy obtained in part d