Quie (A) 42. 1. Jackson and sons Inc would like to determine the optimal safety stock to maintain for a product. Each stock out will cost $75; the carrying cost for each safety stock unit will be $1. the product will be ordered five times a year. The following probabilities of running out of stock during an order period are associated with various safety stock levels. (6) Safety stock level probability of stock out 10 units 40% 20 40 80 20 10 5 2. Assume you have a product with the following parameters: Annual Demand- 6250 uni Holding cost per year = 10% of average inventory investment. More over cost of warehou rent and insurance amounts to $0.9 and Order cost $20 per order Currently compa purchases an item for $ 1 each and is buying units of material X4 annually in lots of 1000 (Marks 2+2+3+2) i. Calculate total ordering and total carrying cost under current policy and current order size is 1000 units. ii. Calculate EOQ using formula method and compute related ordering and carrying cost. iii. If Supplier offers a 5% discount at a purchase of 3000 units which order size will be mor economical. iv, assuming a 300-day work year calculate the frequency of orders