1. You are working as a supply chain specialist for a distributor of Canadian Crown Royal. Its average monthly demand is 60,000 liters with a standard deviation of 6,000 liters. Your cost for Crown Royal is $15 per liter. Your boss follows a policy of ordering a fixed quantity of 60,000 liters. The replenishment lead time is 8 days. Annual inventory carrying cost is 10% of the cost of goods and replenishment cost is $400 per replenishment. You maintain a customer service level (CSL) of 94 percent. Use 30 days a month. Compute the following:

A. Average demand during the risky period (3)

B. Safety stock and reorder point (10)

C. Average Inventory (5)

D. Annual Inventory Carrying cost and replenishment cost. (7)

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