Assignment task: Supreme Cola
Supreme Cola is a supplier of fountain equipment to restaurants, bars and cafeterias. Supreme has one common platform design to which they add various features and accessories to create 10 different product options. The lead time for receiving a batch of products to their distribution center is 2 weeks and it costs $1,500 to place an order (including delivery, all the paper-work costs and etc.).For product ACola, Supreme uses a Normal distribution with mean 25 and standard deviation 20 to model weekly demand. Demands across weeks are independent. ACola sells for $15,000and they enjoy a 50% gross margin. The annual holding cost for inventory is 20% of the product's cost. Supreme Cola uses a continuous review (ROP) model with service level equal 95%. Assume 50 weeks in a year and 5 days a week in answering the following questions. (a) What is the economic order quantity (EOQ)?(b) What is the ROP? (c) What is the safety stock? (d) Find the total inventory level in the system, including those "on truck" , assuming the order the economic order quantity and use the optimal ROP.(e)Find the expected number of times Supreme Cola will order in a year. What is the annual expected ordering cost? What is the economic order quantity (f) Find the total expected annual holding cost?