Read the Case Study: Managing Mollusks in order to answer the questions below.

Post your comment on the Discussion Forum.

Read your classmates comments and write comments for at least two of your classmates writings.

The value of the Case Study is 20 points.

_ The deadline for the questions can be found in "Tools" located in "Calendar" in the Blackboard platform.

Case Study: Managing Mollusks

Tandos Restaurant of Virginia Beach offers one of the most varied and unusual menus in the resort city. The restaurant has acquired a fine reputation for exquisite and unique dishes and is best known for its entrees that are ethnic adaptations of sea scallops. Due to the unusual preparation of these dishes, this seafood has become the largest-selling menu item.

Tandos does not purchase scallops locally, but receives shipments from a purveyor who serves its sister operation Tandos of Branford Connecticut. This practice is followed for quality and price reasons. Tandos management feels the transportation charges are minimal compared to the value derived from other factors. The New England purveyor has an established route to other local operations and is able to fill orders within three days.

Tom Gengler, one of the proprietors, has been ordering scallops by intuition. His results are dissatisfying: Tandos experience spoilage and shortages too frequently. Tom is certain that now is a good time to reconsider his service policy and to test theoretical inventory methods as well.

Tom has spent the greater part of the week determining the cost data for the scallops and has itemized results as follows:

Annual demand = 2500 dozen

Ordering cost = $25 per order

Purchase cost = $7/dozen

Stockout cost = $3.50/dozen

Holding cost = 50% of value

Knowing the unpredictability of customers, Tom cringes at estimating daily demand. Even though scallops are a perennial favorite, demand can be erratic. Based on scanty documentation, he has constructed a table of daily demand for the scallops:

Demand (doz./day)	Frequency
6	35
7	35
8	15
9	10
10	5

Tom assumes his distribution does not differ significantly from the Poisson distribution. Considering the Poisson an adequate surrogate and stockouts as lost sales, he has found a reorder point of 16 dozen with an apparent safety stock of 3 dozen.

1. How should inventory policies for sea scallops be established if they are to be kept fresh before preparation? Kept frozen before preparation?

2. Assuming his inventory policy is consistent with his service policy, has Tom done a thorough and precise job?

3. Briefly describe the selection and use of demand distributions for this menu item.