Problem 1

The annual demand of training shoes is 12,500 units. The cost to place an order is Dhs 150 and the holding cost is 20% per year of the cost of the pair of shoes. The purchase price schedule is as follows:

Less than 300 pairs Dhs 100

300 to 499 pairs Dhs 95

500 to 999 Dhs 90

1000 and more Dhs 85

Compute the economic order quantity.

Problem 2

The maintenance center of Baghdad Taxi Airport receives cars at an average rate of 3 cars per hour for different operations (repair, or oil change). There are 3 mechanics that perform the maintenance at a mean time of 30 minutes. Assume that the arrival and service times are exponentially distributed. Compute:

a) The probability that the mechanics are free.
b) The probability that there are three cars in the maintenance center.
c) The average number of cars in the queue.
d) The average number of cars in the maintenance center.
e) The average time that a coming car will spend in the queue.
f) The average time that a coming car expects to stay in the maintenance center before leaving it.