lead time. Currently, stock outs are valued at R10 per unit per occurrence, while inventory carrying costs are R4 per unit per year. a) Should the firm add safety stock? If so, how much safety stock should be added? b) What is the new ROP? [12] TOTAL: [85] DUE DATE: 24 MARCH 2023 @ 13H00 VIA BLACKBOARD You can work in groups (maximum of 6 per group) NB: NO LATE SUBMISSION WILL BE ACCEPTED FACULTY OF BUSINESS \& MANAGEMENT SCIENCES Department of Operations Management ASSIGNMENT 1: OPERATIONS MANANGEMENT 2 (PRB260S) QUESTION 1 a) Explain in your own words the term project and give an example. b) DRAW the Work Breakdown Structure of the Diploma: Operations Management. c) Would a project manager ever consider crashing a noncritical activity in a project network? Justify your answer convincingly. [15] QUESTION 2 The following table represents a plan for a project: a) What is the critical path of this project? b) What is the expected completion time of this project? c) What is the probability of completing the project in more than 33 days? d) What is the probability of completing this project in 20 days? e) If the probability of completing this project is 98%, after how many days will it take to complete this project? f) When do you think that this project can be completed? g) Is there any slack time for this project? If yes, what is the total slack time of this project? h) Draw the Gantt chart of this project. NB: make use of the expected time of each activity. [33] QUESTION 3 A retail store has decided to put on a "special sale" one of its quick perishable items during the end of every week. The store has estimated that out of its 5000 weekly customers, on average 60% of them will buy that item, with a standard deviation of 5 . The cost of the item is R50, and the selling price is R110. Any remaining item will be sold at R30 the first day of the following week. a) Compute the optimum stock level for the item. b) What is the stockout risk for this optimum stock? [10] QUESTION 4 The following network diagram and the table that shows the normal times and the crash times, along with the associated costs for each activity, represent a project. a) If the project is to be shortened by four days, show which activities, in order of reduction would be shortened and the resulting cost. b) What is the total cost to reduce the project by four days? c) What is the Total cost to complete the project if the project is to be reduced by four days? [15] QUESTION 5 A product has a reorder point of 250 units and is ordered 9 times a year on average. The following table shows the historical distribution of demand values observed during