Problem 6: A building materials supplier obtains its bagged cement from a single source. The annual demand is normally distributed with the average of 3,000 tonnes and standard dev. of 220 tonnes. The lead-time for a supply is 10 days. Each time an order is placed, an administrative employee spends around one hour reviewing the inventory level, preparing the order, tracking the delivery, and updating records. When the delivery is received, it takes roughly one worker hour to unload, inspect, and store the material. The administrative staff member's wage is $30 per hour and the warehouse employees are paid $16 per worker hour. The delivery charges are included in the purchase price. The company purchases cement at $120 per tonne. The annual cost of capital is 10%. Other annual costs of holding inventory are estimated to be 5% of the purchase cost. How much should the company order at a time? What will be the Reorder Point if the desired service level during the lead time is 98%? [8 Marks] Problem 7: The manager of a bottle-filling plant needs to decide the economic production quantity in a production run for a drink with reasonably constant demand of 90,000 per month. The plant fills bottles at a rate of 2,000 bottles per hour. A month has 300 production hours. The cost of setup is $120 per run. Holding cost $0.06 per bottle per month. [4 Marks] Problem 8: A supermarket manager gets deliveries of its Value-White bread after every five days. The bread loafs are best for six day. The cost of bread to the supermarket is $0.7 per loaf and the selling price is $1.5 per loaf. At the end of the 5th day, the manager reduces the selling price of the unsold loafs to $0.5/loaf. Bread generally sells out at the reduced price. The 5 days demand for this bread can be approximated using a normal distribution with a mean of 800 and standard deviation of 40. How many loafs of bread should be ordered for each delivery? (5 Marks]