Inventory Control & Simulation

Question
The annual demand for widgets is 16,000. Widgets cost $7.00 each and the holding rate is 35%. Every
time an order is placed, an order cost of $52.00 is incurred. One can assume a constant lead time of four
days, and that there are 250 work days in the year.
a. What is the EOQ?
b. What is the annual holding cost?
c. What is the re-order point?
d. What is the re-order point if demand is variable with a daily standard deviation of 15 units, and
if management have a policy that stock outs can occur, at most, on 15% of cycles? What is the
safety stock?
e. What is the annual holding and order costs resulting from the policy in part (d)?