Scenario $12\mathrm{.}6$

A company operating under a continuous review system has an average demand of $50$ units per week for the item it produces. The standard deviation in weekly demand is $20$ units. The lead$-$time for the item is six weeks, and it costs the company $$30$ to process each order. The holding cost for each unit is $$10$ per year. The company operates $52$ weeks per year. A normal distribution table follows.

Use the information in Scenario $12\mathrm{.}6.$ What is the desired safety stock level if the company has a policy of maintaining a $90\%$ cycle$-$service level?

Less than or equal to $50$ units

Greater than $50$ but less than or equal to $100$ units

Greater than $100$ but less than or equal to $150$ units

Greater than $150$ units