Greener Pastures Incorporated (GPI) produces a high-quality organic lawn food and weed eliminator called Super Green (SG). Super Green is sold in 50-pound bags. Monthly demand for Super Green is 75,000 pounds. Greener Pastures has capacity to produce 33,000 50-pound bags per year. The setup cost to produce Super Green is $300. Annual holding cost is estimated to be $5.00 per 50-pound bag. Currently, GP is producing in batches of 2,100 bags.
(Round your intermediate calculations to 4 decimal places, and your final answer to 2 decimal places.)
Calculate the total annual costs of the current operating policy at GPI.

Calculate the economic production quantity (EPQ).
?bags

Your new company has decided to use a periodic review system. You have learned that average weekly demand is 46 units per week with a standard deviation of 9 units. You believe that your cycle-service level should be 94 percent. Lead time is two weeks. Initially, you believe that you should do a review every Friday.

(Round your intermediate calculations and final answers to nearest whole numbers, the tolerance is +/-1.)

Determine the required safety stock and the target inventory level.
Safety stock = ?units
TI = ?units
How would this procedure change if the cycle-service level needed to be 98 percent?
safety stock becomes , and the target inventory becomes 

What is the impact of changing the review period from every Friday to every other Friday, assuming that the cycle-service level is 93.9 percent?
Safety stock = ?units
TI = ?units

Healthy Plants Ltd. (HP) produces its premium plant food in 50-pound bags. Demand for the product is 100,000 pounds per week. HP operates fifty weeks per year and can produce 250,000 pounds per week. The setup cost is $200 and the annual holding cost rate is $0.55 per bag. Currently, HP produces its premium plant food in batches of 1,000,000 pounds. Determine what will happen if HP uses the economic production quantity model to establish the quantity produced each cycle.

(Round your answers to 2 decimal places, the tolerance is +/-0.01.Do not round your intermediate computations.)

(a) Calculate the economic production quantity (EPQ)

pounds or bags

(b) Calculate the maximum inventory level using the EPQ
pounds or bags

(c) Calculate the total annual cost of using the EPQ

(d) Calculate the penalty cost HP is incurring with its current policy