Question 1:

1. A billiard ball maker must place orders for resin, a raw material for billiard balls. It uses resin at a rate of 80 kilograms each day, and incurs a cost of $0.5 per kilogram per day to hold inventory. The ordering cost is $200 per order. Lead time for delivery is 4 days. Assume 365 day in a year. If the order quantity is 1,600 kilograms, what is the ratio of the average inventory level in this scenario over the optimal average inventory (which is associated with the optimal order quantity)? [Round your final number with three decimals, if needed]

   		0.158
   		0.331
   		3.310
   		6.324
   		None of the above

Question 2:

1. The GoodTaste Dairy has decided to begin selling milk in one-litre plastic bottles and to do this (and ensure an adequate supply of empty bottles) they have decided to extrude (make) their own on site. The production of these new and yet-to-be-filled bottles is 280 cases (100 per case) per day, but their demand in the filling plant is only 240 cases per day. The setup cost to manufacture plastic bottles is $1000 and the plant operates for five days per week for 52 weeks of the year. The holding cost for one case of bottles for one year is $30. [ Choose the closest answer.] What is the total annual cost of setup and inventory holding if the plant decided to make 8,000 cases of bottles at one time?

   		61188.23
   		24942.86
   		17150.66
   		11,500.25
   		None of the above