Question: The university cafeteria uses 700 cases of canned fruit cocktail per year and is open 50 weeks a year. The manager calculates holding cost to be $10 per case per year and the cost of processing each order to the supplier to be $20.

1. How many cases should be ordered each time?
2. The lead time for receiving an order is 1 week. Assuming demand is a constant 14 cases per week, what is the re-order point (ROP)?
3. Suppose weekly demand is better modeled as a normal distribution with a mean of 14 cases and a standard deviation of 3 cases. You wish to maintain a service level (probability of no stockout) of $95 \%$. What is the ROP under this scenario?

Price: $2.99

Solution: The downloadable solution consists of 3 pages
Deliverable: Word Document