# Puppy food inc. (pfi) sells a very popular blend of dog food at price

Problem 3.Puppy FoodInc.( (r,Q) problem) (Total: 1.5 points)

Puppy Food Inc. (PFI) sells a very popular blend of dog food at price \$20 per bag. Demand for the dog food has a Normal distribution with a mean 250 bags per week and a standard deviation of 20 bags per week. They order the dog food from Nutritious & Delicious Co.. It takes 2 weeks for delivery. Each order occurs a fixed ordering cost \$25. Any demand that cannot be satisfied is backordered, and PFI estimates the backorder cost as \$4 per bag per week.

The weekly holding cost for each bag of flour is 2% of the selling price.

1. What is the percentage of orders that has to WAIT to be fulfilled (backorders)?

The percentage of orders that has to WAIT to be fulfilled is . (0.25 points)

1. Please calculate the reorder point r. (0.25 points)

The reorder point r = .

1. Please calculate the order quantity. (0.25 points)

The order quantity Q = .

1. At the beginning of certain week, Puppy Food Inc. (PFI) monitors their on-hand inventory of the dog food as 250 bags, and there are 300 bags of dog food in transit. Should Puppy Food Inc. order more, or not? If yes, how many bags should they order? If no, explain why. (0.25 points)

1. At the beginning of another week, Puppy Food Inc. (PFI) have on-hand inventory of 50 bags, and 200 bags in pipeline. Should Puppy Food Inc. order more, or not? If yes, how many bags should they order? If no, explain why. (0.25 points)