Please solve the following problems related to Inventory Management
1. A produce distributor uses 2500 packing crates per year. The manager has assigned an annual carrying cost of $5 per crate.
Ordering cost is $20.
(a) How much is the order quantity based on EOQ model?
(b) How much is the total cost using EOQ model?
Hint: Please read Example Problems 1-3 in Chapter 13 on page 583-584.
2) A lab orders a number of chemicals from the same supplier every 30 days. The lead time is six days. The assistant manager of the lab must determine how much of one of these chemicals to order. Check of stock reviewed that 12 25-milliliter (ml) jars are on hand. Daily usage of the chemical is appropriately normal with a mean of 20 ml per day and a standard deviation of 1.8 ml per day. The desired service level for this chemical is 95%.
a) How many jars of the chemical should he ordered?
b) What is the average amount of safety stock of the chemical?
Hint: Please read Example Problems 10-11 in Chapter 13 on page 575.
Please type your answer and the steps of computation in a Word file.
(Please DO NOT just write the answer. Show the steps that you solve the problems.