GUIDELINES: Solve the following 5 questions on this word document (typed not hand written), in the given space underneath cach question (you can add more space if needed), write the complete equations used and substitute the values to find the final answer. Each question is stated in terms of variables (x1, x2). Refer to the below table for the values of the variables (x1, x2) for your group. Submit the assignment on the MS-Teams, do not send it by email. Only one of the students in the group should submit it. Don't send multiple files. Late assignments will not be accepted. There is no excuse for internet problems. Question 2 x1 x2 Group # x1 1 2 Question 1 X2 80 3 90 4 5 15000 16000 6 3 3 100 120 5 6 4 4 2800 Question 3 x1 X2 100000 $2,500 95000 $2,400 90000 $2,300 85000 $2,200 80000 $2,100 75000 $2,000 70000 $1,900 65000 $1,800 60000 $1,700 55000 $1,600 Question 4 x1 X2 2500 $4.00 2600 $4.50 2700 $5.00 $5.50 2900 $6.00 3000 $6.50 3100 $7.00 3200 $7.50 $8.00 3400 $8.50 Question 5 x1 X2 $2.0 $1.50 $2.5 $1.70 $3.0 $1.90 $3.5 $2.10 $4.0 $2.30 $4.5 $2.40 $5.0 $2.50 $5.5 $2.60 $2.5 $2.00 $3.0 $2.10 5 6 17000 18000 20000 22000 21000 23000 24000 25000 3 4 5 6 140 160 180 200 220 240 7 8 5 6 3 4 9 3 4 3300 5 6 10 Question 1: A company begins a review of ordering policies for its continuous review system by checking the current policies for a sample of SKUs. Following are the characteristics of one item. Demand = xl units/week Assume 52 weeks per year. Ordering and setup cost S= $50/order Holding cost H-$13/unit/year Lead time L = x2 weeks Standard deviation of weekly demand = 12 units Cycle service level = 88 percent a. What is the EOQ for this item? b. What is the desired safety stock? c. What is the reorder point? d. What are the cost implications if the current policy for this item is 9=200 and R=180? Question 2: Your firm uses a periodic review system for all SKUs classified, using ABC analysis, as B or C items. Further, it uses a continuous review system for all SKUs classified as A items. The demand for a specific SKU, currently classified as an A item, has been dropping. You have been asked to evaluate the impact of moving the item from continuous review to periodic review. Assume your firm operates 52 weeks per year, the item's current characteristics are: Demand (D) = xl units/year Ordering cost (S)= $125.00/order Holding cost (H) = $3.00/unit/year Lead time (L) = x2 weeks Cycle service level = 95 percent Demand is normally distributed, with a standard deviation of weekly demand of 64 units. a. Use the EOQ to define the parameters of an appropriate continuous review and periodic review system for this item II b. Which system requires more safety stock and by how much? Question 3: Sharpe Cutter is a small company that produces specialty knives for paper cutting machinery. The annual demand for a particular type of knife is xl units. The demand is uniform over the 250 working days in a year. Sharpe Cutter produces this type of knife in lots and, on average, can produce 450 knives a day. The cost to set up a production lot is Sx2, and the annual holding cost is $1.20 per knife. a. Determine the economic production lot size (ELS). b. Determine the total annual setup and inventory holding cost for this item. c. Determine the TBO, or cycle length, for the ELS. d. Determine the production time per lot
