Show transcribed image text Question 3. The daily demand for a spare engine part is a random variable whose distribution, based on past experience, is given below Number of demands per da Probabilit 0.21 0.38 0.19 0.14 0.08 2 4 The part is expected to be obsolete after 400 days. Assume demands from one day to the next are independent. The parts cost $1500 each when acquired in advance of the 400 day period and $5000 each when purchased on an emergency basis during the 400-day period. Holding costs for unused parts are based on a daily interest rate of 0.08%. Unused parts can be scrapped for 1000 of their purchase price Using critical ratio, how many parts should be acquired in advance of the 400-day period? Hint 1: Even though the setting described here is not exactly the standard newsvendor problem with revenue and salvage value, the same concept of shortage (underage) and excess (overage) costs apply; you just need to derive these costs with the parameters described in this problem Hint 2: You may use the Central Limit Theorem to approximate the demand over 400 days