Q25 and Q26

The correct answers are given, please provide step by step explanation, thank you.

Q25.

Max's Floral Shoppes is a three store retailer of fresh "Hawaiian" inspired floral arrangements serving the greater Santa Monica area. Max's has a central refrigerated warehouse where he stores exotic flowers shipped directly to him (by air) from his supplier in Maui Hawaii. The lead-time from order to receipt is 2 weeks. Max's order costs are $150 per order and his holding cost are 10% the cost of a stem. Note that a "stem" is a single flower in an arrangement Sterns are ordered as individual units, each arrangement created by Max has 8 stems and the average cost per stem is $3. The grouping only occurs when the arrangements are created. Max then sells each arrangement for $65. Max's annual demand follows a normal distribution with a mean of 10700 arrangements and a standard deviation of 650 arrangements. To maintain customer goodwill Max's has set a high service level objective of 95% in stock.

What should be Max's ROP (Reorder Point).

Please note, the correct answer is : 4975

Q26

Continuing with Max's Floral Shoppes, what should be the EOQ for Hawaiian Exotic Flowers. Remember that the EOQ must be stated in a multiple of 8.

Please note, the correct answer is : 9253