Question: Please answer Both Questions Question 1 Suppose a grocery store buys milk (in gallon jugs) using the EOQ model with quantity discounts. Holding cost is

Please answer Both Questions

Question 1 Suppose a grocery store buys milk (in gallon jugs) using the EOQ model with quantity discounts.

Holding cost is $0.10 per gallon per day

Order placement cost is $20, regardless of size

Weekly demand is 350 gallons

The milk supplier offers two discount levels for order quantity Q:

$0.05 per gallon when 100 gal. ? Q < 200 gal.

$0.045 per gallon when Q ? 200 gal.

What order quantities need to be checked?

What is the economic order quantity?

Question 2. A gas station sells 1500 gallons of gas every day. If the lead time for orders is four days, what is the reorder point?

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