Northwoods Living is a country store specializing in knickknacks suitable for afarm-house decor. One item experiencing a considerable buying frenzy is a miniature Holstein cow. Average weekly demand is 40 cows, with a standard deviation of 5 cows. The cost to place a replenishment order is $15 and the holding cost is $0.75/cow/year. Thesupplier, however, is in China. The lead time for new orders is 7 weeks, with a standard deviation of 2 weeks. NorthwoodsLiving, which is open only 50 weeks ayear, wants to develop a continuous review inventory system for this item with acycle-service level of 92 percent. Refer to the standard normal tableforz-values.

  

a. Specify the continuous review system for the cows.

What order quantity should beused?

enter your response here

cows. (Enter your response rounded to the nearest wholenumber.)

Part 3

What reorder point should beused?

enter your response here

cows. (Enter your response rounded to the nearest wholenumber.)

Part 4

b. What is the total annual cost for the system youdeveloped?

$enter your response here.

(Enter your response rounded to two decimalplaces.)

4. Sunrise Garden Center buys 425 bags of fertilizer per month for feeding and weeding lawns. The ordering cost is $15.00. Holding cost is $0.25 per bag per year.

Part 2

a.How many bags should Sunrise order at atime?

Sunrise should order

enter your response here

bags at a time. (Enter your response rounded to the nearest wholenumber.)

Part 3

b.What is the time betweenorders?

The time between orders is

enter your response here

months. (Enter your response rounded to one decimalplace.)

5.Haley Photocopying purchases paper from anout-of-state vendor. Average weekly demand for paper is 160 cartons per week for which Haley pays $25 per carton. Inbound shipments from the vendor average 1,250 cartons with an average lead time of 2 weeks. Haley operates 52 weeks peryear; it carries a 3-week supply of inventory as safety stock and no anticipation inventory. The vendor has recently announced that they will be building a facility near Haley Photocopying that will reduce lead time to one week. Further, they will be able to reduce shipments to 400 cartons. Haley believes that they will be able to reduce safety stock to a 1-week supply. What impact will these changes make toHaley's average inventory level and its average aggregate inventoryvalue?

Part 2

The changes decreaseHaley's average aggregate inventory level by

enter your response here

cartons. (Enter your response as a wholenumber.)

Part 3

The changes decreaseHaley's average aggregate inventory value by

$enter your response here.

(Enter your response as a wholenumber.)

6. PrinceElectronics, a manufacturer of consumer electronicgoods, has five distribution centers in different regions of the country. For one of itsproducts, a highspeed modem priced at $360 perunit, the average weekly demand at each distribution center is 70 units. Average shipment size to each distribution center is 450 units, and average lead time for delivery is 2 weeks. Each distribution center carries 2 weeks' supply as safety stock but holds no anticipation inventory.

Part 2

a.Onaverage, how many dollars of pipeline inventory will be in transit to each distributioncenter?

$enter your response here.

(Enter your response as aninteger.)

Part 3

b.How much total inventory(cycle, safety, andpipeline) does Prince hold for all five distributioncenters?

enter your response here

units. (Enter your response as aninteger.)