A distributor of large appliances needs to determine the order quantities and reorder points for the various products it carries.
The following data refer to a specific refrigerator in its product line:
1. Cost to place an order $100
2. Holding cost 20 percent of product cost per year
3. Cost of refrigerator $500 each
4. Annual demand 500 refrigerators
5. Standard deviation during lead time 10 refrigerators
6. Lead time 7 days
Consider an even daily demand and a 365-day year.
Required:
a) What is the economic order quantity?
b) If the distributor wants a 97 percent service probability, what reorder point, R, should be used?

The answer would be false.

$527.7.if the following was the question  $527.7 is the answer.students who are trying to raise funds have an agreement with a local pizza chain. the chain has agreed to sell them pizzas at a discount, which the students can then resell to families in the local community for a profit. it is expected that of the 500 families in the community, at most 70% will buy pizza. based on a survey of their personal preferences, the students believe that they should order no more than 120 cheese pizzas, no more than 150 pepperoni pizzas, and no more than 100 vegetarian pizzas. they also want to make sure that at least 20% of the total pizzas are cheese and at least 50% of the pizzas are pepperoni. they make a profit of $1.45, $1.75, and $1.98, respectively, for each cheese, pepperoni, and vegetarian pizza they resell. how many pizzas of each type should they buy?