1)Identify the appropriate inventory model to obtain the optimal lot size (quant

Question

1)Identify the appropriate inventory model to obtain the optimal lot size (quantity) for the given problem description: A produce distributor uses 800 packing crates a month, which it purchases at a cost of $10 each. The manager has assigned an annual carrying cost of 35 percent of the purchase price per crate. Ordering costs are $28. Select one:

a. Fixed Interval

b. Single Period

c. EPQ

d. EOQ

e. ROP

2)Identify the appropriate inventory model to obtain the optimal lot size (quantity) for the given problem description: A drugstore places an order every fourteen days for many of the items it stocks. The manager of the drugstore wants a service level of 98%. The replenishment lead-time is 2 days. Average demand for one specific item is normally distributed with a mean of 40 units per day, and the standard deviation of demand is 3 units per day.

Select one:

a. Fixed Interval

b. Single Period

c. EPQ

d. EOQ

e. ROP

3) The Friendly Sausage Factory (FSF) can produce hot dogs at a rate of 10,000 per day. FSF supplies hot dogs to regional restaurants at a steady rate of 5000 per day. The cost to prepare the equipment for producing hot dogs is $50. Annual holding costs are 50 cents per hot dog. The factory operates 300 days a year. What is the optimal run size? HINT: PAY ATTENTION TO UNITS; MAKE SURE ALL UNITS MATCH

Select one:

a. 1000

b. 141400

c. 707

d. 2000

e. 24495

Explanation / Answer

1.d. EOQ

2.c. EPQ

3. b. 141400

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