Question 4-2 SHOW ALL WORK

Table 5

Demand	52,000 units/year
Standard deviation of weekly demand	120 units
Ordering costs	$50 /order
Holding cost	$0.60/unit/year
Cycle-service level	95%
Lead time	2 weeks
Number of weeks per year	52 weeks

A firm uses the periodic review system to control the item depicted above. It reviews the item's status every three weeks (P = 3). At the most recent review an inventory clerk just checked the inventory of this item and found 1200 units. There were no scheduled receipts and no back orders. How many units should be ordered?

Select one:

a. Less than or equal to 3500 units

b. Greater than 5000 units

c. Greater than 4500 but less than or equal to 5000 units

d. Greater than 3500 but less than or equal to 4500 units