Problem 1 ( 12 points) A company sells a product with a weekly demand of 50 units. Every time the company orders from a supplier, it costs the company $30. The weekly holding cost per unit is $0.2. The company orders the product from a supplier with a lead time of 2 weeks. 1. ( 2 points) What is the optimal batch size (Q) and reorder point (R) ? 2. (2 points) Under the (Q,R) policy in part 1 , what are the weekly ordering cost and holding cost? The company discovers that the weekly demand has some uncertainty and is normally distributed with mean 50 and standard deviation 7 . Answer the following questions. 3. (2 points) What is the level of safety stock necessary to guarantee that the stock-out probability is at most 1% ? 4. (2 points) What is the new (Q,R) policy? 5. (4 points) What are the average weekly ordering cost and holding costs now? Compare with the costs in part 2 , how much do your costs go up? Problem 1 ( 12 points) A company sells a product with a weekly demand of 50 units. Every time the company orders from a supplier, it costs the company $30. The weekly holding cost per unit is $0.2. The company orders the product from a supplier with a lead time of 2 weeks. 1. ( 2 points) What is the optimal batch size (Q) and reorder point (R) ? 2. (2 points) Under the (Q,R) policy in part 1 , what are the weekly ordering cost and holding cost? The company discovers that the weekly demand has some uncertainty and is normally distributed with mean 50 and standard deviation 7 . Answer the following questions. 3. (2 points) What is the level of safety stock necessary to guarantee that the stock-out probability is at most 1% ? 4. (2 points) What is the new (Q,R) policy? 5. (4 points) What are the average weekly ordering cost and holding costs now? Compare with the costs in part 2 , how much do your costs go up