USE 3.6 AS REFERENCE ONLY- NO NEED TO SOLVE.

3.7 (Snack Bar Inventory Management, Part 2) For the snack bar in Problem 3.6, suppose now that the demand is different on different days of the week, as given in the following table. Replenishment orders can only be placed at the start of each day. The fixed and holding costs are as given in Problem 3.6. Day (#) Day (Name) Demand 1 Sunday 220 2 Monday 155 Tuesday 105 4 Wednesday 90 5 Thursday 6 Friday 210 7 Saturday 290 3 170 a) Assume that ack bar uses a 7-day planning horizon, beginning on Sunday. Let Cts be the cost to place an order on day t that will last through the end of day s 1, including both the fixed ordering cost and the holding cost. Calculate C12, C47, and C68. b) Suppose instead that the snack bar uses a 3-day planning horizon and that the shortest path network representing fixed and holding costs is as given in Fig- ure 3.13. (The numbers in this figure come from different data than those in part (a).) On which day(s) should the snack bar place orders? 70 40 BPO- 10 15 15 1 2 3 4 20 Figure 3.13 Shortest path network for Problem 3.7. 3.6 (Snack Bar Inventory Management, Part 1) A snack bar at a certain theme park sees a (constant, deterministic, continuous) demand of 150 cases per day. (We are aggregating the various products sold by the snack bar into a single product and expressing its demand in terms of number of cases.) Replenishment orders are placed to a central warehouse located within the theme park, with negligible lead time, and it costs $10 in labor costs to deliver an order to the snack bar from the warehouse. It costs $1.20 per case per day in refrigeration costs and other holding costs to hold cases of food in inventory at the snack bar. a) Calculate the optimal order quantity, Q*, for the snack bar. b) If the snack bar uses Q* as its order quantity, how often will it order? c) Suppose the snack bar must order in multiples of 20 cases. (That is, it must order 20 cases, or 40 cases, or 60 cases, or ....) Do you think the snack bar's costs will increase significantly due to this restriction? Briefly explain your