A. If Mercedes Benz realizes that its annual demand for 500SEL model is 50,000 and their cost of order preparations is $42,000.00 and the inventory carrying cost per car per year is $3,600.00. What will be the Economic Order Quantity?

b. During replenishment of blue diamonds, it is shown that the average demand per period is 4 and the average lead time is 3 per period. What is the standard deviation of demand during replenishment of blue diamond if the standard deviations of demand per period and lead time are 1.2 and 1.5 respectively?

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