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-Perform certain calculations discussed in the assigned reading in order to derive an answer for each problem.-Use Microsoft Excel to complete each problem and submit a single Excel spreadsheet that contains a separate worksheet (i.e., separate tab) for each problem.-Have each worksheet be clearly labeled to identify the associated problem.-To show all calculations or other work performed to derive your answer(s) for each problem.-Have your spreadsheet be fully functional (i.e., configured to allow the reader to not only see all numerical values, but also be able to see the underlying formula associated with each calculated value).-To label your work in each worksheet to clearly identify the nature of each piece of data or calculated value.-No credit will be granted for problems that are not completed using Excel, for which your Excel worksheet is not fully functional, or for which you have not shown all of the calculations or other work performed to derive your answer(s).Week 5 Homework Assignment1. A wholesale distributor stocks and sells low flow toilets to contractors for use in commercial office buildings. The estimated annual demand for the toilets is 10,140 units. The estimated average demand per day is 39 units. The purchase cost from the toilet manufacturer is $125.00 per unit. The lead time for a new order is 5 days. The ordering cost is $100.00 per order. The average holding cost per unit per year is $3.75. The distributor has traditionally ordered 390 units each time they placed an order. Based upon using the distributorâs current ordering model:a. What is the average number of units in inventory based upon ordering 400 units each time an order is placed?b.How many orders per year will be necessary based upon ordering 400 units each time an order is placed?c. What is the average dollar value of inventory based upon ordering 400 units each time an order is placed?d. What is the total annual cost (Purchase Cost + Ordering Cost + Holding Cost) based upon ordering 400 units each time an order is placed?e. What is the optimal reorder point based upon ordering 400 units each time an order is placed?2. The wholesale distributorâs manager has recently heard about the EOQ model and is interested in learning whether or not using this model would allow the company to reduce its annual costs by optimizing the number of orders placed each year and the number of toilets purchased in each order. The estimated annual demand for the toilets, estimated average demand per day, purchase cost from the toilet manufacturer per unit, lead time for a new order, ordering cost per order and average holding cost per unit per year remain the same as stated in the scenario for the current ordering model. Based upon using the EOQ model (with instantaneous receipt):a. What is the economic order quantity (EOQ) that will minimize inventory costs?b. How many orders per year will be necessary based upon using the EOQ?c.What is the average number of units in inventory based upon ordering using the EOQ?d. What is the average dollar value of inventory based upon ordering using the EOQ?e. What is the total annual cost (Purchase Cost + Ordering Cost + Holding Cost) based upon using the EOQ?e. What is the optimal reorder point based upon using the EOQ?3. The wholesale distributor has traditionally relied upon an instantaneous receipt model in which the material associated with each order is received in a single batch. The toilet manufacturer has suggested that the distributor might want to consider agreeing to accept receipt of ordered material incrementally over a period of time rather than in a single batch as a means for reducing total annual costs. The toilet manufacturer has advised that his factoryâs daily production rate is 40 toilets, the duration of each production is 30 days, and the set-up cost for each production run is $2,000. The estimated annual demand for the toilets, estimated average demand per day, purchase cost from the toilet manufacturer per unit, lead time for a new order, ordering cost per order and average holding cost per unit per year remain the same as stated in the scenario for the current ordering model. Based upon using the EOQ model without instantaneous receipt (a.k.a., production run model):a. What is the optimal order quantity without instantaneous receipt?b. What is the maximum number of units in inventory without instantaneous receipt?c. What is the average number of units in inventory without instantaneous receipt?d. What is the average dollar value of inventory without instantaneous receipt?e. What is the total annual cost (i.e., Purchase Cost + Ordering Cost + Holding Cost) without instantaneous receipt?f. What is the optimal reorder point without instantaneous receipt?e. How many set-ups per year will be necessary without instantaneous receipt?4. The toilet manufacturer has proposed a quantity discount schedule for toilets as reflected in the following table for consideration by the president of the wholesale distributor as a means to potentially reduce his total annual costs.Discount NumberQuantity OrderedUnit Cost Discount10 to 7500%2751 to 1,5007.5%31,501 and over15%The estimated annual demand for the toilets, estimated average demand per day, purchase cost from the toilet manufacturer per unit, lead time for a new order, ordering cost per order and average holding cost per unit per year remain the same as stated in the scenario for the current ordering model. Based upon using the quantity discount model:a. What order quantity will allow the wholesale distributor to minimize total annual costs (Purchase Cost + Ordering Cost + Holding Cost) by taking advantage of the proposed discount pricing?b. What is the total annual cost (Purchase Cost + Ordering Cost + Holding Cost) based upon taking advantage of the proposed discount pricing?5. The president of the wholesale distributor is concerned about the possibility of stockouts causing a loss of customer confidence and loyalty and is interested in maintaining safety stock in inventory to prevent potential stockouts. Based upon using the safety stock models:a. Assuming demand is normally distributed with a mean of 30 units and a standard deviation of 4.5 units, and a constant lead time of 5 days, what is the reorder point necessary to provide a 97% level of service?b. Assuming demand is constant at 30 units per day, and lead time is normally distributed with a mean of 5 days and a standard deviation of 1.5 days, what is the reorder point necessary to provide a 97% level of service?c. Assuming that demand is normally distributed with a mean of 30 units and a standard deviation of 4.5 units, and lead time is normally with a mean of 5 days and a standard deviation of 1.5 days, what is the reorder point necessary to provide a 97% level of service?
