Question

show work please.

Problem 1: O 4. The Fit Corporation makes two types of widgets that are sold at a retail store. Demand for the widgets (each week) is as shown below: Demand (units) Widget 1 Widget 2 100 0.2 200 0.3 300 0.5 400 0.1 0.2 0.2 0.2 0.3 Thus Fit faces an average demand of 250 widgets per week for each of the two widgets. The widgets cost $40 per unit to produce. The retail price is $70 per unit. All orders are placed by the retail store at the start of the week and are delivered immediately to the store. If the retail store runs out of stock, Fit purchases a widget from a competitor at a cost of $100 per widget and supplies it to the customer. The customer pays (as before) a price of $70 per widget. Weekly holding cost is 10% of the cost of the widget. Yearly demand for o widgets is 13,000 widgets. 4a. Assume that Fit's retail store places orders once a week. Provide an inventory for each product and associated average inventory level at the store.

Answer 1

4-a) TABLE SHOWING WEEKLY INVENTORY AT STORE

		probability		demand as per probability
week	demand	widget 1	widget 2	widget 1	widget 2
1	100	0.2	0.2	20	20
2	200	0.2	0.3	40	60
3	300	0.5	0.3	150	90
4	400	0.1	0.2	40	80
	average inventory			250	250