A local cafe's monthly average consumption is 400 of its most popular dessert each month. Demand is normally distributed with a standard deviation of the monthly demand being 25 deserts. The cafe pays $4 for each dessert purchased. The cost of ordering and receiving shipments is $6 per order. Accounting estimates annual carrying costs are 25% of its value. The supplier lead time is 2 operating days. The cafe operates 240 days per year. Each order is received from the supplier in a single delivery. There are no quantity discounts and the cafe uses a continuous Inventory review Reference the formula sheet and compute your answers. Please complete the below questions and show your formulas for full credit. 1. What quantity should the shop order with each order? 2. How many times per year will the cafe order on average? 3. How many operating days will elapse between two consecutive orders? 4. What is the reorder point if the company wishes to carry a safety stock of 20 deserts? 5. What is the store's minimum total annual cost of placing orders & carrying Inventory (cycle stock)? 6. What is the annual cost to carry a safety stock of 30? 7. What is the standard deviation of demand during the lead time period? 8. What is the safety stock level if the goal is to maintain a service level of 95% (z value 1.645)? 9. What is the reorder point to maintain a service level of 95% 10. If demand variability increased, what would happen to the reorder point? A local cafe's monthly average consumption is 400 of its most popular dessert each month. Demand is normally distributed with a standard deviation of the monthly demand being 25 deserts. The cafe pays $4 for each dessert purchased. The cost of ordering and receiving shipments is $6 per order. Accounting estimates annual carrying costs are 25% of its value. The supplier lead time is 2 operating days. The cafe operates 240 days per year. Each order is received from the supplier in a single delivery. There are no quantity discounts and the cafe uses a continuous Inventory review Reference the formula sheet and compute your answers. Please complete the below questions and show your formulas for full credit. 1. What quantity should the shop order with each order? 2. How many times per year will the cafe order on average? 3. How many operating days will elapse between two consecutive orders? 4. What is the reorder point if the company wishes to carry a safety stock of 20 deserts? 5. What is the store's minimum total annual cost of placing orders & carrying Inventory (cycle stock)? 6. What is the annual cost to carry a safety stock of 30? 7. What is the standard deviation of demand during the lead time period? 8. What is the safety stock level if the goal is to maintain a service level of 95% (z value 1.645)? 9. What is the reorder point to maintain a service level of 95% 10. If demand variability increased, what would happen to the reorder point
