Q1) The manager of a car wash received a revised price list from the vendor who supplies soap, and the promise of a shorter lead time for deliveries. Formerly the lead time was four days, but now the vendor promises a 25% reduction in the lead time. Annual usage of soap is 4,500 gallons. The car wash is open 360 days a year. Assume that daily usage follows the normal distribution, and that it has a standard deviation of 2 gallons per day. The ordering cost is $30 and annual carrying cost is 25% of the purchasing price. The revised price list (cost per gallon) is shown in the table.

Quantity Unit Price
1-399 $2.00
400-799 1.70
800+ 1.62
a. What order quantity is optimal?
b. What ROP is appropriate if the acceptable risk of a stockout is 1.5 percent?

Q2) How does work design, composition, context, and process influence project team performance?