Background:

Wes and Steve are partners in a lunch truck company that operates a central kitchen and operates lunch trucks that

travel to various locations in Philadelphia, Monday$-$Friday. The lunch trucks deliver pre$-$packaged healthy sandwich and

salad alternatives, fresh fruit and pre$-$packaged low$-$fat desserts and canned beverages. Together, the partners have to

make many decisions about how to structure the operational aspects of the business so that it is cost effective, efficient

and profitable.

Analysis $1$:

Wes and Steve purchase many ingredients to produce the lunch truck foods in their central kitchen. In particular, they

buy canned garbanzo beans for their homemade hummus production.

The kitchen uses $90$ cans each week when preparing salads and has estimated that carrying costs for the beans are

$$.\frac{60}{?}$ can$/$year and ordering costs are $$15$ per order. The company operates $350$ days$/$year$.$

Use this information to answer the questions on page $2.$

Analysis $2$:

Wes and Steve also make homemade hot sauce for use in their food manufacturing process. The sauce, which is NOT

perishable, is used at a steady rate of $300$ bottles$/$month$.$ The sauce can be produced at a rate of $80$ bottles$/$day$.$ The

kitchen $($where the sauce is used$)$ operates $360$ days a year. Setup costs are $$25$ for a run of sauce, and holding costs are

$$1\mathrm{.}50$ per bottle. Set up time for each production run of hot sauce is $1$ day.

NOTE: You must calculate $D$ and $u$ for this problem. Use data provided to calculate $D$ first. Then use $D$ and # days

info to calculate $u.***$This is similar to what we discussed in class. $***$

Use this information to answer the questions on page $3.$

Important Notes:

YOU MUST ROUND TO TWO $(2)$ decimal points.

If math is required, you must show all work or you will have points deducted. You cannot just write answers.

You must write neatly and NOT in red ink.

You are not permitted to cross out answers; use white$-$out or start over.

If I cannot read your work, you will receive zero points.

CARRY THROUGH ERRORS COUNT and points will be deducted! Double check your work.

Instructions: Print this$/$next page, reproduce by hand or complete via computer. Regardless, you must note answers on

the line provided ONLY. For math Qs: show relevant math and write answer on line. Round to $2$ decimal points!!

When completed: Take a photo of this page only, save file and upload via the corresponding Assignment link in Canvas

by the due date. Remember: No $.$HEIC files are permitted.

ANALYSIS $1$

Question$/$Work Area

Must write answer here:

What is the optimal order quantity of cans

they should order to meet demand? $(1$ pt$)$

Quantity

What is the total inventory cost for this quantity? $(1$ pt$)$

Total Cost:

How many times per year should they order? $(1$ pt$)$

# of Times:

How far apart should they space the orders to

ensure that they are minimizing carrying costs? $(1$ pt$)$

Days Apart

Their canned goods source has offered a quantity discount schedule to Wes & Steve as shown below. Using this

information $($and showing ALL relevant math$),$ determine the quantity they should order to minimize total costs.

$($Math $=3$ pts; answer $=1$ pt$)$

They should order this

quantity

costing