Question: Problem 2: A certain fertilizer product has an almost constant demand of 125,000 bags per month. The plant can produce 1,000 bags per hour and

Problem 2: A certain fertilizer product has an

Problem 2: A certain fertilizer product has an almost constant demand of 125,000 bags per month. The plant can produce 1,000 bags per hour and each month has 250 production hours. The setup cost is $800 per run. Holding cost of a fertilizer bag is $0.1 per year. What will be the best production quantity of this product in each production run? [4 Marks) Problem 3: A garden centre orders a summer lawn fertilizer once every year. Its customers do no prefer to buy fertilizers from the previous year's stock. The cost of a fertilizer bag for the garden centre is $20. The centre sells the current year's stock at $28 per bag and previous year's stock at $18 per bag. The demand per year is 1,500 bags, which is normally distributed with a standard deviation of 110 bags. How many bags the centre should order each year? [5 Marks]

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