Question: 3 a ) A company uses 1 , 2 5 0 large cans of tomatoes a month, at an average rate of 5 0 per

3 a) A company uses 1,250 large cans of tomatoes a month, at an average rate of 50 per
day for each of the 25 days per month the company is working. Usage can be approximated by a normal distribution with a standard deviation of 3 cans per day. Lead time is constant at 5 days. Monthly carrying costs are 1 per can and ordering costs are 100 per order.
i. Determine the economic order quantity.
ii. Find the variable inventory costs per month.
iii. For a service level of 98 per cent, how many cans of tomatoes should the company have on hand when it places the order?
3 a ) A company uses 1 , 2 5 0 large cans of

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