model with the fixed quantity inventory model. Using the same data as in question 1, That is, your cycle time is still 10 days. Compute (a) to (g) above, especially the safety stock and inventory related costs. Determine the reorder point also. 3. You are a supply chain specialist for Fastmart, a retailer. Its average weekly demand for potatoes is 20,000 bags, with a standard deviation of 4,000 pounds. A bag contains 10 pounds of potatoes that you buy from a farmer at a cost of 20 cents per pound. Your inventory carrying cost that includes cost of capital, storage, spoilage, etc., is 1% per month. Your cost of replenishment including transportation, labor, etc. is $400 and your supplier delivers a truckload of 50,000 bags per delivery. Your supplier takes 5 days to deliver a truckload of potatoes after you place an order. Determine the following: a. Your order-size b. Time between orders/replacements or cycle time c. Safety stock and reorder point if you maintain a customer service level of 94 percent d. Annual inventory holding cost including cost of safety stock e. Annual replenishment cost f. After computing (d) above, you realize that your policy of getting replenishments of a truckload of 50,000 bags makes your inventory related costs very high. Your boss asks you to utilize your knowledge of inventory management and that reminds you of optimal order quantity. If you follow an optimal order quantity policy, compute the following: i. Your order/replenishment size ii. Annual inventory holding cost and replenishment cost iii. Annual savings by following your optimal order size policy. 4. Your boss recently attended a seminar where he learnt of fixed interval order policy and liked it. And he asks you to use information of Problem 3 above and compute the following if you count inventory every 10 days and place orders for potatoes: a. Risky period b. Maximum and minimum inventory c. Annual inventory holding and replenishment costs d. Your order size if your stock at hand on the day of ordering is 5,000 bags. e. Based on your calculation, which policy is the best