Advance Operations Management

Part 2 (10 Marks) b) The Elite Cafe serves puried bottles of m to its customers. The daily demand for m is normally distributed. with an average demand of 18 bottles and a standard deviation of 4 bottles- The lead time to receive an order of m 'om the local supplier is 3 days. Determine the safety stock and reorder point if the Cafe wants to maintain : i) 90% service level { 5 Marks) ii) 95% service level (SMarks) (See NORM DISTRIBUTION TABLE at end ofthfspaper) Part 3 (8 Marks) amLtd. uses EOQ logic to determine the order quantity for its various components and is planning its orders. The Annual consumption is 80,000 units, Cost to place one order is 3 1.200, Cost per unit is S 50 and carrying cost is 6% of Unit cost. Determine: i) EOQ. {3 Marks) ii) No. of order per year, (2 Marks) iii) Ordering Cost, Car-wing Cost and Total Cost of Inventory {3 Marks)