You are testing the idea of selling Spirit items and, you want to apply your new skills to optimize your inventories. Your first item, the Rocks T-shirt is a hot item. Each unit sells for $20 and is sourced from an efficient vendor in Toronto for $10 (including shipping costs to Cleveland). Assume that over-ordering can be corrected monthly. However, you have the ability to make the T-shirt in your back room, nearly instantaneously, at a cost of $15, if you run out of a given size. You finance your inventories with a line of credit with an annual rate of 10%.

Question:Your mission is to determine the percent of demand you choose to protect with safety stock inventory. Hint: Consider the Critical Fractile (Cu {Cu+Co}). Note: please show your calculations to ensure as much credit as possible.