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Question 1
A manufacturer produces umbrellas with the followingparameters:
The monthly demand for umbrellas is 3000
Daily usage is 100 (assume 1 month = 30 days and demand isuniform throughout the month)
The production rate is 400 per day
Setup cost is $200 for a run
Holding cost is $1 per umbrella per month
What is the economic production quantity?
Question 2
Suppose a gas station has expected sales of 6000 gallons duringlead time. Sales are normally distributed with a standard deviationof 400 gallons.
To avoid stockouts with probability P(z < +3.00), what shouldbe the reorder point?
Question 3
Suppose a gas station has daily sales of 1500.
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