The Cosmopolitan Store Wants to Use a Periodic Review System

Multiple Choice

The Cosmopolitan store wants to use a periodic review system for its basic apparel product. The product has an annual demand of 7,200 units. Their order cost is $75, and their inventory carrying cost is 18% per dollar per year. The cost of each product is $20. The purchase order lead time is 1 week, and the average daily demand is 18 units, with a standard deviation of 4 units. Cosmopolitan would like to maintain a 99% service level.
-What is the target inventory level?

A) 548 units
B) 666 units
C) 706 units
D) 716 units
E) 723 units