1) Jean-Marie Bourjolly's restaurant has the following inventory items that it orders on a weekly basis: Inventory Item $ Value/Case #Ordered/Week Rib eye steak 157 5 Lobster tail 267 8 Pasta 45 10 Salt 25 5 Napkins 34 17 Tomato sauce 45 27 French fries 65 5 Pepper 25 9 Garlic powder 33 13 Trash can liners 34 8 Tablecloths 54 6 Fish fillets 165 6 Prime rib roasts 188 6 Oil 50 35 Lettuce (case) 57 14 Chickens 97 5 Order pads 34 5 Eggs (case) 44 15 Bacon 78 6 Sugar 26 6 a) Which is the most expensive item, using annual dollar volume? b) Which are C items? c) What is the annual dollar volume for all 20 items? 2) Myriah Fitzgibbon, of L.A. Plumbing, uses 1200 of a certain spare part that costs $24 for each order, with an annual holding cost of $25. a) Calculate the total cost for order sizes of 25, 40, 60, 70, and 120. b) Identify the economic order quantity and consider the implications for making an error in calculating economic order quantity. 3) Race One Motors is an Indonesian car manufacturer. At its largest manufacturing facility, in Jakarta, the company produces subcomponents at a rate of 17500 per year, and it uses these subcomponents at a rate of 12550 per year. Holding costs are $2 per item per year, and ordering costs are $20 per order. a) What is the economic production quantity? b) How many production runs per year will be made? c) What will be the maximum inventory level? d) What percentage of time will the facility be producing components? e) What is the annual cost of ordering and holding inventory? 4) Mr. Beautiful, an organization that sells weight training sets, has an ordering cost of $40 for the BB-1 set. (BB-1 stands for Body Beautiful Number 1.) The carrying cost for BB-1 is $5 per set per year. To meet demand, Mr. Beautiful orders large quantities of BB-1 seven times a year. The stockout cost for BB-1 is estimated to be $50 per set. Over the past several years, Mr. Beautiful has observed the following demand during the lead time for BB-1: Demand During Lead Time Probability 40 50 30 60 70 80 0.1 0.1 0.2 0.3 0.2 0.1 The reorder point for BB-1 is 60 sets. What level of safety stock should be maintained for BB- 1? 5) Halifax Cigar stocks Cuban cigars that have variable lead times because of the difficulty in importing the product: Lead time is normally distributed with an average of six weeks and a standard deviation of three weeks. Demand is also a variable and normally distributed with a mean of 200 cigars per week and a standard deviation of 25 cigars. a) For a 94% service level, what is the ROP? b) What is the ROP for a 91% service level? c) Explain what these two service levels mean. Which is preferable? 6) Cynthia Knott's seafood restaurant buys fresh Nova Scotia lobster for $4.5 per pound and sells them for $9 per pound. Any lobsters not sold that day are sold to her cousin's nearby grocery store for $1 per pound. Cynthia believes that demand follows the normal distribution, with a mean of 100 pounds and a standard deviation of 15 pounds. How many pounds should she order each day?