The Krewe of Orpheus maintains a supply of swizzle sticks for events throughout the year. Demand for swizzle sticks is shockingly low, a quick check of krewe records from last year reveals that their annual demand is only 585,000. The company seeks to manage this year's inventory using the EOQ model. Swizzle sticks are not expensive items, they cost 5 cents apiece largely due to the club logo printed on each one. The order lead time is about one-week. It costs $15 to place an order, most of this cost is a result of explaining the meaning of "Laissez les bons temps rouler" and why it should be printed on the edge of each swizzle stick. The annual inventory carrying cost is 1 cent per unit. The Krewe of Orpheus is open 7 days a week and there are 52 weeks a year. A new intern from SU, Joanna, tries to solve this inventory problem using the follow formulae: and R (reorder point) = Daily demand*Lead-time (in days),annual ordering cost = C_o*D/Q, annual inventory carrying cost = C_c*Q/2 and annual purchasing cost = C_p*D.

Sub-question 1: What is their reorder point R if their order size is half of the EOQ? ____ ?____

A) 11,250

B) 15,750

C) 46,837

D) 83,785

Sub-question 2: Supposethe supplier doesn't want to deal with small orders and thus requires all buyers to order at least 50,000 each time. How much should they order each time? ____ ?____

A) 41,892

B) 46,837

C) 50,000

D) 51,892

Sub-question 3: Supposethe supplier sells only in large packages, where each package contains 1,000 swizzle sticks. How much should they order each time? ____ ?____

A) 41,000

B) 42,000

C) 46,000

D) 47,000

Sub-question 4: Supposedue to serious capacity issues, the supplier must extend the lead time to two weeks. The optimal order size will ____ ?____

A) double.

B) increase, but not by double the amount.

C) remain the same.

D) decrease.

Sub-question 5: Suppose the supplier offers the following purchasing cost discount: 10% discount for orders50,000swizzle sticksand 20% discount for orders500,000swizzle sticks. How much should they order each time? ____ ?____

A) 41,892

B) 46,837

C) 50,000

D) 500,000

Sub-question 6: What is the increase in their EOQ if all the model parameters triple? ____ ?____

A) 300%

B) 73%

C) 41%

D) 30%