1. Wildcat Tools is a distributor of hardware and electronics equipment. Their socket wrench inventory needs better management. The information regarding the wrenches is given below.

   Demand 50 wrenches per month Lead time 1 month Order cost - $20/order Holding cost - $2.40/wrench/year Lead time service level 90% Standard deviation of monthly demand 20 wrenches Current on-hand inventory is 65 wrenches, with no scheduled receipts and no backorders.

   1. (a) The company decides to use a continuous review system. What are the recommended reorder point, safety stock, and the economic order quantity?

   2. (b) Based on the information calculated in (a), should an order be placed? If yes, how much should be ordered?

   3. (c) The company wants to consider another inventory replenishing system that orders twice per month. How much safety stock is required? What is the order-up-to level?