Problem 1:

Jills Job Shop buys the following Part (X-123) for use in its production system. The parts are needed throughout the entire 52-week year. Data for the part are as follows:

ITEM	X-123
Annual demand	10,000
Holding cost per unit per year	$4
Order cost	$300
Lead time	4 weeks
Safety stock	100 units
Item cost	$10.00

a) Compute the optimal order quantity. (6 points)

b) What is the reorder point for X-123? (4 points)

Problem 2:

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

Benji would like to use an inventory system (Fixed - Order Quantity model) that minimizes inventory cost and will provide a 95 percent service probability.

At what inventory level (reorder point) should he place an order? (6 points)

Problem 3:

UDI Pharmaceuticals orders its antibiotics every three weeks (21 days) when a salesperson visits from one of the Pharmaceutical companies. Tetracycline is one of its most prescribed antibiotics, with average daily demand of 2,000 capsules. The standard deviation of daily demand was derived from examining prescriptions filled over the past three months and was found to be 400 capsules. It takes four days for the order to arrive.

UDI uses Fixed Time Period Model. UDI would like to satisfy 95 percent of the prescriptions. The salesperson just arrived, and there are currently 20,000 capsules in stock. How many capsules should be ordered? (4 points)

Please show work, I need to know how to do it, Thanks.