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1: A museum of natural history opened a gifl shop which operates52 weeks per year. managing invertories has become aproblem.Top-selling SKU is a bird feeder. sale are 18 uits perweek, the supplier charges $60 per unit. Ordering cost is $45.annual holding cost 25 percernt of a feeder's value. managementchose a 390-unit lot size

what is the annual cycle-inventory cost of the current policy ofusing a 390-unit lot size?

would a lot size of 468 be better?

2 : For the bird feeders in Example 1, calculate the EOQ and itstotal annual cycle-inventory cost. how frequently will orders beplaced if the EOQ is used?

3: suppose that you are reviewing the inventory policies on an$80 item stocked at a hardware store. the current policy is torepleish inventory by ordering in lots of360 units. additionalinformation is:

D= 60 units per week, or 3,120 units per year

S=$30 per oder

H= 20% of selling price, or $20 per unit per year

what is the EOQ?

What is the total annual cost of the current policy( Q=360), andhow does it compare with the cost with using the EOQ?

4: A company buys re-writable DVDs ( 10 disks/ box) from a largemail- order distibutor

the company uses approximately 5,000 boxes/ year at a fairlyconstant rate

the distributor offers the followig quantity discountschedule:

* if < 500 boxes are ordered, then cost =10/ box

* if > 500 but < 800 boxes are ordered, then cost = $9.50

* if > 800 boxes are ordered, then cost = $9.25

fixed cost of purchasing = $25,and the cost of capital = 12% peryear. there is no storage cost.

5: The on-hand inventory is only 10 units, and the reorder pointR is 100. there are no backorders but there is one open order for@00 units. should a new order be placed?

6: demand for chicken soup at a supermarket is always 25 cases aday and the lead time is always 4 day. the shelves were justrestocked with chicken soup, leaving an on-hand inventoy of only 10cases. no backorders currently existm but there is one open orderin the pipelibe for 200 cases. what is the invetory position?should a new order be placed?

7: The Office Supply shop estimates that the average demand fora popular ball-point pen is 12,000 pens per week with a standarddeviation of 3,000 pens. the current inventory policy calls forreplenishment orders 156,000 pen. the average lead time from thedistributor is 5 weeks, with a standard deviation of 2 weeks. ifmanagement wants a 95 percent cycle-service level, what should thereorder point be?