Operation research 2 Homework #1 Group #: Group names: 1. 2. 1. The daily demand for a popular CD in a music store is approximately N(200, 20). The cost of keeping the CD on the shelves is $.04 per disc per day. It costs the store $100 to place a new order. There is a 7-day lead time for delivery. Determine the store's optimal inventory policy given that the store wishes to limit the probability of shortage to at most .02. 2. The daily demand for camera films at a gift shop is N(300, 5). The cost of holding a roll in the shop is $.02 per day, and the fixed cost of placing a replenishment order is $30. The shop's inventory policy is to order 150 rolls whenever the inventory level drops to 80 units. It simultaneously maintains a buffer of 20 rolls at all times. a. (a) Determine the probability of running out of stock. b. (b) Given the data of the situation, recommend an inventory policy for the shop given that the shortage probability cannot exceed .10