Quetions #1 A perishable dairy product is ordered daily at a particular supermarket. The product, which...

Quetions #1

A perishable dairy product is ordered daily at a particular supermarket. The product, which costs $1.18 per unit, sells for $1.75 per unit. If units are unsold at the end of the day, the supplier takes them back at a rebate of $1 per unit. Assume that daily demand is approximately normally distributed with µ = 160 and ? = 30.

What is your recommended daily order quantity for the supermarket? If required, round your answer to two decimal places.

Q* =

What is the probability that the supermarket will sell all the units it orders? If required, round your answer to four decimal places.

P(Stockout) =

In problems such as these, why would the supplier offer a rebate as high as $$1? For example, why not offer a nominal rebate of, say, 25¢ per unit? What happens to the supermarket order quantity as the rebate is reduced?

The higher rebate the quantity that the supermarket should order.

Question #2

Apply the EOQ model to the following quantity discount situation in which D = 550 units per year, Co = $45, and the annual holding cost rate is 30%.

Discount Category	Order Size	Discount (%)	Unit Cost
1	0 to 99	0	11
2	100 or more	2	10.78

What order quantity do you recommend? If required, round your answer to two decimal places.

Expert Solution

keosha answered 7 months ago

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