Scenario: Carrier sells air conditioning units to distributors. Ahead of the upcoming summer, demand probability is 40,000 units (25%), 55,000 units (35%), 70,000 units (25%), and 80,000 units (15%).

• Fixed cost of production = $500,000
• Variable cost of production per unit = $1,200
• Per unit selling price= $1500
• Salvage value for unsold products = $900

1. With an expected demand of 55,000 units for the summer (May-July), a maximum demand of 80,000 units for the summer, and a 2-week lead time, calculate the amount of safety stock needed to cover demand.