The below question carries 20 marks. And as per the guidelines of the university, the answer should be a min eight hundred Words. Please make a min of eight hundred words answer

Q. M/s Futurama handles a variety of imported auto components. One of the key components is suspension systems. Considering the criticality of this part, the company has built a separate storage facility that has an annual fixed cost of US$, 5000. Since the components are imported, the company is incurring following ordering costs

Delivery cost per order = US$2000

Import Duty per Order = US$300

Custom Fees per Order = US$200

Import License per annum = US$200

There is a total demand of 12000 pieces per annum (monthly demand of 1000 pieces with a standard deviation of 100 pieces). The supply lead time is 1 month with a standard deviation of 0.3 months. The company is conveniently placing one order every month with an average qty of 1000. The cost per piece is US$30. The annual holding cost rate is 30%. Calculate cycle stock and safety stock point if the firm is willing to tolerate a 1% chance (Z0.99 = 2.32) of a stock out during an order cycle. Also, calculate the total cost of inventory.(20 Marks)