1) Classify the following list of items as A, B, or C item.
|
Item
|
Estimated Annual Demand
|
UnitPrice
|
|
H4-010
|
20,000
|
2.50
|
|
H5-201
|
60,200
|
4.00
|
|
P6-400
|
9,800
|
28.50
|
|
P6-401
|
14,500
|
12.00
|
|
P7-100
|
6,250
|
9.00
|
|
P9-103
|
7,500
|
22.00
|
|
TS-300
|
21,000
|
45.00
|
|
TS-400
|
45,000
|
40.00
|
|
TS-041
|
800
|
20.00
|
|
V1-001
|
33,100
|
4.00
|
2) A small grocery store sells fresh produce, which it obtains from a local farmer. During the strawberry season, demand for fresh strawberries can be reasonably approximated using normal distribution with a mean of 40 quarts per day and a standard deviation of 6 quarts per day. Excess costs run 35 cents per quart. The grocery orders 49 quarts per day.
a) What is the implied cost of shortage per quart?