2
Cu = $125
C
o
= $250
,
NORMSINV(.333)=0.43164
Should purchase 25 + (.43164)(15) = 18.5254.
Super Discount should overbook 19 passengers on
the flight.
3
= 22.36
22
4
Service level P = .95, D = 5000,
= 5000/365, T = 14 days, L = 10 days,
= 5 per day, and I =150.
= 24.495
From Standard normal distribution, z = 1.64
= 218.94
219
6
a.
= 1975.23
1975
From Standard normal distribution, z = 1.64
= 515(1) + (1.64)25 = 556
b.
Holding cost =
= $3,258.75
Ordering cost = = $3,259.49
c.
Holding cost =
= $3,300.00
Ordering cost = = $3,218.75
Total annual cost with discount is $6,518.75 – 50(25750/2000) = $5,875.00, without discount it is
$6,518.24.
Therefore, the savings would be $643.24 for the year.
24
= 31.62 32 refrigerators
10 refrigerators
From Standard normal distribution, z = 1.88
= (500/365)(7) + (1.88)10 = 9.59 + 18.8 = 28.39 28 refrigerators
Order 32 refrigerators when the onhand inventory level reaches 28 refrigerators.
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Quantity range
Cost (C)
EOQ
Feasible
Less than 2500 pounds
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 Spring '11
 MILBRATH
 Normal Distribution, Planned Order releases, planned order, planned order receipts, $0.82

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