LOGT 4231 Fall 2022 - Inventory Problem1 Lory runs a local pet shop called Paws r Us. She has been runnirie into some invember gratlems and decided to seek your help in better managing her ordering schedule. She prorides wath you ber sales data as well as some cost figures. From the sales data, vou estimate that Pwas R Us verts st eare tors a week on average with a standard deviation of 11. The average delivery vimi for a sicmint is 02 weeks with a standard deviation of 0.09 weeks. Lory faces a per order cont of 513 and an inventan helline cod of $1.90 per toy per week. Lory would like to malntain a service level of 92% : 1. What is the economic order quantity? 2. What is the safety stock and reorder point? 3. What are weekly cycle inventory holding costs, safety inventory haldirg covts, and wroening costs? What is the weekly total costs? 4. Lory decides to look around for a more reliable delivery compary. She finds one that is 100% reliable, thus reducing the standard deviation of lead vimes to 0 . How does this changen her safety stock inventory? 5. Due to a change in production processes, the supplier has announced that orders can oniy be shipped in multiple of 5 units. How many toys should Lory order now? What is the additional cost caused by the deviation from the optimal order quantity? Problem 2 Betty Crocker is the owner of Betty's Bakery, a bakery shop located just off the historic town uquate Business has not been good lately as would-be customers frequenthy leave the store disgruntied vi their preferred pastries are not in stock. At the same time, costs have soared as Betty has had to of left-over pastries. Betty remembered that you are logistics whiz and decides to ask you for yo She buys cronuts for $1.25 a piece and reselis them for a $3.49. Betty likes to seli fresh pastries throws away any leftovers at the end of the day. 1. Looking at Betty's sales records from the last month, you estimate that average dah 34 cronuts with a standard deviation of 9 . Please create an excel table to solve this a. Create a column with expected demand and probabilities of realizing thos b. Provide a scatter plot with expected demand as the x-axis and probabilit those demands on the y-axis. c. Assume that Betty decides to order 30 cronuts. 1. Estimate the sales for each demand realization ii. Calculate costs for ordering 30 cronuts iii. What is the expected profit for each demand realization? W those profit? d. Using solver find the optimal order quantity of cronuts betty shov total profit? 2. Verify your answer in Q1 by using the newsvendor formula given in cla