1-Tastee Mart sells Frostee Flakes. Demand for Frostee Flakes is 1,200 boxes per month. Tastee Mart has a holding cost of 35 percent and incurs a fixed cost of $216 for each replenishment order it places for Frostee Flakes. Given that the cost per box of Frostee Flakes is $2, if a trade promotion lowers the price of Frostee Flakes to $1.80 for a month, how much should Tastee Mart order given this short-term price reduction (i.e. at the discounted price)?

6,773

10,133

7,884

9,067

2-The rising popularity of bubble and squeak as a breakfast item on the menu has resulted in a steady demand for peas. Over the course of the past week, 360 patrons have ordered the hearty breakfast and each serving contains a half cup of English peas. It costs $0.025 cents to hold a half cup of peas in inventory for a year and $25 to place an order. It takes two weeks to ship a container from England loaded with peas. The restaurant operates 50 weeks a year. What is the optimal order quantity?

1,500 cups

6,000 cups

1,250 cups

3,000 cups