A grocery store uses a fixed order cycle policy for ordering the paper towels it sells to their customers. Demand for the paper towels is normally...
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I am seeking an answer to the follow questions for supply chain.


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1. A grocery store uses a fixed order cycle policy for ordering the paper towels it sells to their customers. Demand for the paper towels is normally distributed with a mean of 50 rolls per day
and a daily standard deviation of three rolls. The order interval is 12 days with a lead time of three days. The quantity of paper towel rolls in stock at the time of reorder for three order
cycles is given in Table 9.2. (17 points)
Table 9.2. Paper Towels in Stock
Order Cycle Inventory on Hand
1
35
2
4
3
88
Determine the order quantity for each of the three order cycles. Assume that the service level is 95%.

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2. A manager of a college bookstore, Emily Ford purchases polo shirts from a local vendor with the college name and logo printed on them. Emily purchases these polo shirts from the vendor
at a cost of US $20 per shirt. The bookstore incurs an ordering cost of US $80 per order, and the annual holding cost is 20% of the purchase cost of a shirt. Emily estimates that the demand
for the polo shirts for the upcoming year will be 2,000 shirts. The vendor is willing to offer quantity discounts to the bookstore according to the following table. (18 points)
Table 9.3. Vendor Discount Schedule
Order Quantity
%Discount on per-
unit purchase cost
0 to 499
0%
500 to 699
3%
700 to 999
4%
1,000+
5%
Given this quantity discount schedule, what is the optimal quantity of polo shirts that Emily should order, and what would be the total annual cost at this optimal order quantity?

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3. A creamery shop sells a special blend of mango and vanilla ice cream. The cost to the shop of making this ice cream is US $3.00 per quart and it sells it for US $4.50 per quart. The demand
for this is normally distributed with a mean of 35 quarts per day and a daily standard deviation of 4 quarts. At the end of each business day, any unsold ice cream is purchased by local
restaurants for US $1.50 per quart. (10 points)
o Determine the service level.
o What is the optimum stocking level for this service level?

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