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Metropolitan Bus Company purchases diesel fuel from American Petroleum Supply. American Petroleum Supply charges $250.00 to cover delivery expenses. The lead time for a new shipment from American Petroleum is 10 days and the cost of holding a gallon of fu...

Cress Electronic Products manufactures components used in the automotive industry. Cress purchases parts for use in its manufacturing operation of different suppliers. One particular supplier provides a part where the assumptions of the EOQ model are real...

A manager of an inventory system believes that inventory models are important decision-making aids. Even though often using an EOQ policy, the manager never considered a backorder model because of the assumption that back orderes were “bad” and should be...

A product with an annual demand of 1000 units has Co = $25.50 and Ch = $8. The demand exhibits some variability such that the lead-time demand follows a normal probability distribution with μ = 25 and σ = 5. 1. What is the recommended order quantity? 2. W...