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XYZ factory operates 5 2 weeks per year. It uses a part with code RW 1 . Weekly demand for RW 1 follows a normal

XYZ factory operates 52 weeks per year. It uses a part with code RW1. Weekly demand for RW 1 follows a normal distribution with a mean 90 units and standard deviation of 15 units. The cost of each unit of RW1 is $11.70. Holding costs are based on a 27% interest rate. Lead time is given as 3 weeks (constant). Ordering cost is $54 per order.

a) What is the economic order quantity?

b) If the desired service level (Type I) is 80%, what is the safety stock?

c) Determine the Reorder Point for the same service level as part b.

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