Problem 3. (20 pts) The local supermarket buys lettuce each day to ensure fresh produce. Each morning any lettuce that is left from the previous day is sold to a dealer that resells it to farmers who use it to feed their animals. This week the supermarket can buy fresh lettuce for $5.00a box. The lettuce is sold for $12.00 a box and the dealer that sells old lettuce is willing to pay $1.50 a box. Past history says that tomorrow's demand for lettuce (Normally distributed) averages 200 boxes with a standard deviation of 35 boxes. a. What are the unit underage cost and overage cost? b. How many boxes of lettuce should the supermarket purchase tomorrow? Problem 4. (20 pts) Next week, Super Discount Airlines has a flight from New York to Los Angeles that will be booked to capacity. Revenue from a ticket on the flight is $125. If the flight is overbooked, the airline has a policy of getting the customer on the next available flight and giving the person some coupons, which in total incurs a cost of \$250. Assume that in this case the customer does not need to pay for the original ticket. Past history show that the number of no-shows has the following distribution a. What are the unit underage cost and overage cost? b. By how many seats should Super Discount overbook the flight? Problem 5. (20 pts) Use EOQ model to solve following problem. The item is demanded 50 weeks a year. Item cost: $10 Fixed Order cost: $250 Annual holding cost: 25% of item cost Average demand: 500 per week, constant rate a. Calculate the optimal order quantity and the total inventory cost