1. You have a one-time chance to purchase an item for $8. The item can be sold to customers for $46. After one day, the item has no salvage value because it becomes rotten at the end of the day. It will then cost you $19 to properly dispose of any unsold items. You think you can sell 1,900 units in one day, but you also know that the standard deviation of demand for the item is 50 units. Use Appendix A.
How many units should you order? (Round your intermediate calculations to 2 decimal places and final answer to the nearest whole number.)
Number of units ____________ units
2. You are the buyer for your university bookstore. One of the textbooks has a cost to you of $165 and you sell it to students for $330. In this case, however, you cannot salvage any value from copies that do not sell because a new edition is published every semester. Demand for this text averages 145 copies each semester, with a standard deviation of 23 copies. Use Appendix A.
How many should you order each semester? (Round your intermediate calculations to 2 decimal places and final answer to the nearest whole number.)
Emerson should order _______ units
3. Bryson Carpet Mills produces a variety of different carpets. Changing from production of one carpet to another involves a setup cost of $1,700. Annual demand for this style is 141,000 yards. Bryson Carpet Mills produces carpet 300 days per year. The production process is most efficient when 6,700 yards per day are produced at a cost of $6.50 per yard. Inventory carrying cost is estimated at 15 percent annually.
What should be the production order quantity? (Round up your answer to the next whole number.)
Production order quantity ________ yards