SCENARIO 1 A manufacturing company Grass Huts Manufacturing Limited (GHM), operating under a continuous review system, has an average demand of 50 units per week for the item it produces. The standard...

Extracted text: SCENARIO 1 A manufacturing company Grass Huts Manufacturing Limited (GHM), operating under a continuous review system, has an average demand of 50 units per week for the item it produces. The standard deviation in weekly demand is 20 units. The lead-time for the item is six weeks, and it costs the company $30 to process each order. The holding cost for each unit is $10 per year. The company operates 52 weeks per year. A normal distribution table is appended to this exam. a) Use the information in Scenario 1. What is the desired safety stock level, if the company has a policy of maintaining a 95% cycle-service level? b) Use the information in Scenario 1. What is the Reorder Point, if the company has a policy of maintaining a 95% cycle-service level? c) Use the information in Scenario 1. What is the Reorder Point if the company finally decides to implement a 98 percent cycle service level? d) If lead-time increases by three weeks, what is the reorder point needed to maintain a 98% service level?