Answer Happy

Q1: Ollah's Organic Pet Ship sells about 4000 bags of free-range dog biscuits every year. The fixed ordering cost is $15, and the cost of holding a bag in inventory for a year is $2. 2. Suppose Oivan oecides to order 200 bags at a time. What would the total ordering and holding costs for the year be? And what is the total cost if Ollah decides to order economic order quantity? 3. Average weekly demand for free-range dog biscuits is 80 bags per week, with a standard deviation of 16 bags. Ollah uses a continuous Inventory review system to manage inventory of the biscuits. Ollah wants to set the reorder point high enough that there is only a 5% chance of running out before the next order comes in. Assuming that the lead time is a constant 2 weeks, what should the reorder point be? (Hint: constant lead time indicate that the standard deviation of lead time is zero)