Q. The B&S Novelty also Craft Shop in Bennington, Vermont, sells a variety of quality handmade items to tourists. B&S will sell 300 hand-carved miniature replicas. Inventory Models soldier every year however the demand pattern during the year is uncertain. The replicas sell for $20 every also B&S uses a 15% annual inventory holding cost rate. Ordering costs are $5 per order also demand during the lead time follows a normal probability distribution with μ 15 also s 6.

a. Elucidate what is the recommended order quantity?

b. If B&S are willing to accept a stock out roughly twice a year, Elucidate what reorder point would you recommend? Elucidate what is the probability which B&S will have a stock out in any one order cycle?

c. Elucidate what is the safety stock also annual safety stock costs for this product?