5. The Seldom Seen Ranch in Muckinfut, Texas, is in the process of developing an inventory control system for purchasing hay that will cope with Texas-size uncertainty. Seldom Seen foreman Horace Cints prepared the following information on Seldom Seen’s hay use:

Average demand during lead time = 1,000 bales Lead time = 1 month Economic order quantity = 2,500 bales Forecast interval = 1 month Mean absolute deviation of forecast error = 40 bales Desired probability of stocking out = 0.10

a. How much safety stock will be required?

b. What is the reorder point?

c. What is the customer service level for this policy?

d. What decision rule should Horace Cints use in ordering hay, assuming constant hay usage throughout the year?