Sample Final 2310 - MATH 2310 Sample Problems 1 1 Daily...

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MATH 2310 Sample Problems 1 1. Daily demand for packages of five videotapes at a warehouse store is found to be normally distributed with mean 50 and standard deviation 5. When the store orders more tapes, the ordering cost is $42 and the orders take 4 days to arrive. Each pack of tapes costs $7.20 and there is a 24% annual holding cost for inventory. Assume the store is open 360 days a year. (a) What is the EOQ? (b) If the store wants the probability of stocking out to be no more than 5%, and demand each day is independent of the day before, what reorder point should be set? (c) How much of your reorder point in part (b) is safety stock? 2. Zip Games purchases blank 3.5-inch disks onto which it copies its software for sale through its mail order operation. A disk costs Zip $.20. Processing an order for more disks cost $15. Zip uses 60000 disks annually, and the company has a 25% cost of capital. 3. Henderson Furniture sells reproductions of 18th century furniture. For a particular table, the as- sumptions of the inventory model with backorders are valid. D = 200 tables per year I = 25% per year C = $800 per table C o = $80 per order C b = $50 per table per year The store is open 250 days a year.
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