SB Cooper Company has average demand ...Cooper Company has average demand of 75 units per day. Lead timefrom the supplier averages 10 days. The combined standard deviationof demand during lead time is 25 units. The item costs $55 andinventory carrying cost is 28%. Answers to the next two questions arebased on this information.

1 standard deviation covers 84.13%

1.04 standard deviations covers 85%

1.28 standard deviations covers 90%

1.65 standard deviations covers 95%

1.96 standard deviations covers 97.5%

2 standard deviations covers 97.72%

2.33 standard deviations covers 99%

3 standard deviations covers 99.86%

6 standard deviations covers 99.99966%

questions to answer

Suppose management decides it wants to offer a 97.5% service level. That is,Cooper Company is willing to experience a stock-out probability of 2.5% during theorder cycle.

1) How much safety stock should be carried?

A 33 units

B 35 units

C 46 units

D 25 units

2) how much is the annual inventory, caring cost of the safety stock because of the decision round your answer to the nearest integer value

A $755

B$610

C $594

D$ 351

3) suppose you tell management at Cooper company it should raise safety stock to the six sigma level. Compared to a 97.5% service-level Cooper company Will in cure an additional inventory caring cost of approximately how much?

A $2160

B $234

C $1556

D cannot be determined