1. Describe the importance of inventory management as it relates to the Farmers Restaurant.

2. What ordering system would be best for this situation?

3. Given the following information, provide an example of how much of Farmers Sausage Gravy Mix should be ordered. You are doing the order for Thursday. Also, Kristin would like a service level of 95%, and you have found that there is a standard deviation of 3.5 units per week, and a moving average weekly demand of 35 servings. The gravy mix comes in packs of two servings. There are currently three packs in inventory.

4. Given the above information and an on- hand inventory of 12, deter-mine the risk of stock out at the end of initial lead time and at the end of the second lead time. The lead time is 2 days and orders are placed once a week.

5. The supplier Kristin uses is located in Ohio. Why might Kristin consider dealing with a nearby supplier instead of the one in Ohio? What reasons might there be for not switching suppliers?

Farmers Restaurant is a full service restaurant offering a variety of breakfast, lunch, and dinner items. Currently, Kristin Davis is the general manager for the Farmers Restaurant located in the Grand Rapids/ Wyoming metro area of Michigan. Since becoming manager, Kristin has faced some difficulties with ordering the right amounts of food items for the restaurant. Because of this, there are some weeks the restaurant has a surplus of menu items that are no longer fresh, and must be discarded. At other times, the restaurant has experienced shortages of some items. The fact that inventory accounts for an average cost of 26% of the restaurant's total revenues underscores the importance of managing inventory. Kristin would like to find a way to ensure that she is maintaining the proper amount of inventory. Customer counts at Kristin's restaurant have been declining recently, so one of Kristin's greatest focuses is to keep current customers and attract new customers. She believes that a key aspect of this is having all of the items on the menu in stock.