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Question: 1 the soft goods department of a large department store...

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1) The soft goods department of a large department store sells 175 units per month of a certain large bath towel. The unit cost of a towel to the store is $2.50 and the cost of placing an order has been estimated to be $12.00 The store uses an inventory carrying charge of 1-27% per year. Determine (a) the optimal order quantity the order frequency, and (c) the annual holding and setup cost. If, through automation of the purchasing process, the ordering cost can be cut to $4.00, what will be (d) the new economic order quantity. (e) the order frequency, and ( annual holding and setup costs? Explain these results (20 points)
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2) Demand for a product is approximately normal, averaging 5 units per day with a standard deviation of 1 unt per day, Lead time for this product is approximately normal, averaging 10 days with a standard deviation of 3days. What reorder point provides a service level of 90 percent (ze 1.28)? (10 points
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