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Problem 1 A company will begin stocking remote control devices. Expected monthly demand is 800 units. The controllers can be purchased from either supplier A or supplier B. Their price lists are as follows: Supplier A Supplier B Ordering cost is $40 and annual holding cost is 25% of unit price per unit. Which supplier should be used and what order quantity is optimal if the intent is to minimize total annual cost? Problem 2 Demand for walnuts fudge ice cream at the Sweet Cream Dairy can be approximated by a normal distribution with a mean of 21 gallons per week and a standard deviation of 3.5 gallons per week. The new manager desires a service level of 90%. Lead time is 2 days, and the dairy is open seven days a week. (Hint: work in terms of weeks.) a) If an ROP model is used, what ROP will be consistent with the desired service level? How many days of supply are on hand at the ROP, assuming average demand? b) If a fixed-interval model is used instead of an ROP model, what order size would be needed for the 90% service level with an order interval of 10 days and a supply of 8 gallons on hand at the order time