1.Wholemark is an Internet order business that sells one popular New Year greeting card once a year. The cost of the paper on which the card is printed is $0.05 per card, and the cost of printing is $0.15 per card. The company receives $2.15 per card sold. Since the cards have the current year printed on them, unsold cards have no salvage value. Its customers are from the four areas: Los Angeles, Santa Monica, Hollywood, and Pasadena. Based on past data, the number of customers from each of the four regions is normally distributed with mean 2,000 and standard deviation 500. (Assume these four are independent.) What is the optimal production quantity for the card? (Hint: You cannot add standard deviations, but you can add variances, when the distributions are independent from each other) Group of answer choices

Between 7000 and 8000 Between 8000 and 9000 More than 9000 Less than 7000

2.You are a newsvendor selling the San Pedro Times every morning. Before you get to work, you go to the printer and buy the days paper for $0.25 a copy. You sell a copy of the San Pedro Times for $1.00. Daily demand is distributed normally with mean 250 and standard deviation 50. At the end of each morning, any leftover copies are worthless and they go to a recycle bin. How many copies of the San Pedro Times should you buy each morning?

Between 280 and 300

Between 300 and 320

Between 320 and 340

Less than 280

3.Gentle Bens Bar and Restaurant uses 5,000 quart bottles of an imported wine each year. The effervescent wine costs $3 per bottle and is served only in whole bottles because it loses its bubbles quickly. Ben figures that it costs $10 each time an order is placed, and holding costs are 20 percent of the purchase price. It takes three weeks for an order to Weekly demand is 100 bottles (closed two weeks per year) with a standard deviation of 30 bottles.

Ben would like to use an inventory system that minimizes inventory cost and will provide a 95 percent service probability.

Question: What is the economic quantity for Ben to order, and at what inventory level should he place an order?

Group of answer choices

Order Quantity around 40 and Reorder Point around 385

Order Quantity around 40 and Reorder Point around 50

Order Quantity around 400 and Reorder Point around 50

Order Quantity around 400 and Reorder Point around 385

4. The annual demand for a product is 15,600 units. The weekly demand is 300 units with a standard deviation of 90 units. The cost to place an order is $31.20, and the time from ordering to receipt is four weeks. The annual inventory carrying cost is $0.10 per unit.

Find the reorder point necessary to provide a 98 percent service probability.

5.

The annual demand for a product is 15,600 units. The weekly demand is 300 units with a standard deviation of 90 units. The cost to place an order is $31.20, and the time from ordering to receipt is four weeks. The annual inventory carrying cost is $0.10 per unit.

Suppose the production manager is asked to reduce the safety stock of this item by 50 percent. If she does so, what will the new service probability be?

Group of answer choices

Between 80% and 90%

Between 90% and 100%

Less than 70%

Between 70% and 80%