The cycle service level of 95%. The company operates 52 weeks per year. Below is the data on the observed demand for SWS108 for weeks 11 to 21 (We dont have observed demand data for this part for weeks 1-10 since this is a new product that is introduced in week 11):

Week Actual Demand 11 18 12 33 13 53 14 54 15 51 16 53 17 50 18 53 19 54 20 49 21 52

Currently, at the end of week 21, we have 324 on hand inventory (no backorders or scheduled receipts). Lot size for orders coming is currently 1,000, and lead time has been 3 week on average. The company has been charging $8.89/item as the wholesale price for SWS108. The profit margin for The company is 48% (of the wholesale price). Based on past data, holding cost per item for any part is at 21% of the items value. This holding cost includes both the physical cost of carrying and storing the parts, and the opportunity cost of investing funds in inventory. The company incurs a fixed out-of-pocket cost of ordering supplies each time they place an order. This cost is estimated to be $10 per order. If The companys customer wants the parts to be delivered to them, The company contracts with a third-party distributor, who charges $21.40 per order. The company adds this charge to their customers final bill.

QUESTIONS a. What would be your plan for inventory ordering strategy (i.e. how much to order)? b. What would be the safety inventory and reorder point? c. What would be the total annual costs for this proposed inventory plan? d. How would the current and proposed plans compare in terms of cost (while recognizing all the relevant costs)? e. By how much do your recommendations for these two items reduce annual cycle inventory and safety stock?