Dyson specializes in repairing vacuum cleaners. Dyson receives
weekly deliveries from its vacuum cleaner belt supplier, who replenishes belts up to a level
that Dyson appliance is free to specify. Dyson buys a very popular belt at a unit price of
$17.50. The annual inventory carrying charge is 20%. Weekly demand for belts is normally
distributed with mean 86 and standard deviation 24. Dyson management wants to limit
the probability of a stock-out on any given week not to exceed 1%.
(a) What replenishment level would