Question 1 Omar Haaris receives 5000 tripods annually from Top-Grade Supplier to meet his annual demand. Omar runs a large photographic outlet, and the tripods are used primarily with 35mm cameras. The ordering cost is $15 per order, and the carrying cost is $0.50 per unit per year. Weekly demand is 100 tripods.
A) What is the optimal order quantity?
QUESTION 2 Based on available information, lead time demand for CD-ROM drives averages 250 units (normally distributed), with a standard deviation of 25 drives. Management wants a 98% service level.
A) How many drives should be carried as safety stock?
B) What is the appropriate reorder point?