QUESTION 34)

Demand for bottled water dispensed by the vending machines located in Anderson Student Center is normally distributed with a mean of 100 bottles/day and standard deviation of 10 bottles/day. It costs $50.00 per order to replenish the vending machines and $0.91 to carry a bottle of water in inventory for one year. Determine the reorder point (ROP) required for maintaining a service level of 95% if the UST Food Services manages the inventory with a delivery lead-time of 4 days.

Assume (i) 7 days/week, (ii) 52 weeks/year for all calculations.

QUESTION 35)

Demand for bottled water dispensed by the vending machines located in Anderson Student Center is normally distributed with a mean of 100 bottles/day and standard deviation of 10 bottles/day. It costs $50.00 per order to replenish the vending machines and $0.91 to carry a bottle of water in inventory for one year. Determine the target inventory (U) required for maintaining a service level of 95% if the vending machines are replenished every Sunday by the Pepsi Co. during a weekly visit using a VMI (Vendor Managed Inventory) system .

Assume (i) 7 days/week, (ii) 52 weeks/year for all calculations.