1. [7'] Paul Baldwin. a recent MBA graduate. came up with the idea for an electronic device for vending machines. The device would monitor the machine's inventory and would lie alile to transmit wireless information instantaneously to the vending corporation as often as needed. Without such a device, vending companies usually schedule periodic visits to each of their machines to restock and collect revenues. By transmitting information before a restocking visit, the device would allow for better planning and potential savings. Paul wanted to measure the potential impact of his device on soft drink vending machines, so he tried to think of different ways the vending company might Ilse it to make stocking decisions. One possible scenario would be for the device to monitor demand and inventory, and transmit replenishment orders as needed according to a (Q.R} policy. Pan] estimates that a leadtime of 2 weeks gives the company adequate time for effective distribution scheduling and delivery. A 12 oz can costs $0.10 to the company and sells for 30.05 on the vending machines. In addition to the lost sale, the company estimates an additional [goodwill] loss of $0.35 per stocked-out can from future sales. Shipping costs are $200 per order. Tile company uses a cost of capital of 25% annualy. W'eekly demaan for a typical vending machine is normally distributed with a mean of 1000 and standard deviation of 10. Assume 52 weeks per year. For a typical vending machine: [a] [1] What is the economic order quantity? {h} [2] Calculate the liest service level. (c) [2] What is the reorder point? {d} [2] \"That is the average inventory