2 Problems (5 points each, 20 totalpoints) Show the logical steps of your work.

Question

2 Problems (5 points each, 20 totalpoints) Show the logical steps of your work. Show calculations, as required, not simply the final an swer. Partial credit may be provided at the discretion of the instructor. 1. Eoxie Owl's Besty Bagel shop makes fresh bagels. She has to buy raw materials fresh ev- ery day for selling on that day, and wants to know exactly how much should she spend orn raw materials. did some analysis over the past month and came back with the following numbers daily demand was equally likely to be 100, 125, 150, 175, or 200 bagels . fresh bagels could be sold at $4 each day-old bagels are sold at $1.50 each at the end of the day raw materials for each bagel is estimated at $2.50 to make all customers happy, Foxie Owl gives a 25 cent discount coupon to each customer when she's out of bagels, for use next time (a) How many bagels should Foxie plan to sell? 4 (b) How much will she spend on raw materials for these bagels? (c) What is her profit? (d) What is her customer service level, and fill rate (both FRi and FR2)? 2. Foxie used some sophisticated demand forecasting models, and determined that her de- mand was normally distributed, with a mean of 150, and a standard deviation of 15. All other information stays the same. Answer the previous question with this new demand information

Explanation / Answer

1.(a) number of bagels should be planned to sell is mean of daily bagels sold.

(100+125+150+175+200)/5= 150

(B) raw materials costs $150×2.5= $ 375

(c) profit is mean of all days considered I.e $4 × total fresh bagels - $2.5× total bagels raw material cost + $1.5× total left bagels- $.25× total unavailable bagels. Calculation for 5 days is

= $4×675 - 2.5×150×5+ $1.5×75-$.25×75= $2700-$1875+112.5-18.75=$918.75

(d) customer service level , as on average 3days the demand is fulfilled out of 5 days so it's 60%

And fill rate comes out to be total demand-total demand not fulfilled/total demand

= 750-75/750=90%

2(a) foxie plan to sell 150 bagels with 15 standard deviation

(b) raw material costs $150×2.5+15×2.5= $337.5 - $412.5  

( c) profit is above profit I.e $918.75 + profit taking 15 units in consideration.

=75×4-75×2.5+30×1.5-45×.25= $ 146.25

Coming out to be $772.5 to $1065

(d) customer service level remains same 60%

Fill rate is now =750-45/750= 94%

3. Accounting way = 4×675 + 1.5×75- 2.5×750-.25×75= $2700+112.5-1875-18.75=$918.75

OM way = (4-2.5)×700- (.25×75+1.5×75)= $1050-131.25=$918.75

4. a. 2500 every time

b. 15 days

C. 250

D. =150×2+250=550

Avg daily sales×DELIVERY LEAD time+ left over stock

E. =2500/15= 167 units

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