The manager of the Dyson store at Westgate mall is planning for the inventory of its Supersonic Hair Dryer. Assume a fixed-order quantity system. Here is the information needed:

Average Demand for the hair dryer: 20 units/week

Lead time = 5 weeks

Order cost = $800/order

Unit cost = $500

Carrying rate = 20%

Standard deviation of weekly demand = 30

Desired service level = 95% (z - value = 1.645)

Number of weeks per year = 52

Calculate the economic order quantity and the reorder point to have 95% service level. Discuss the advantages and disadvantages of the fixed-order quantity system.