• 1) A health care products distributor has demand of 49000 cases of bandages each year. The purchase price of a case is $200, and the lead time is 3 weeks. The inventory carrying charge is 25% per year, and it costs $250 to place an order. A pallet holds exactly 200 cases, so the bandage manufacturer requires that cases be purchased in multiples of 200 (i.e., 200, 400, 600, …). How many cases of bandages should the distributor order each time to minimize total cost while meeting vendor requirements? What is the total cost associated with this quantity?
• 2) The health care products distributor sells an antibiotic (TST03-A) to retail drug store chains for $156.30 per bottle. The distributor purchases TST03-A at $28.20 per bottle from an international source that, due to limited air cargo service from the vendor’s home country, can only make weekly deliveries. If the distributor runs out of TST03-A before the next delivery is received, any additional chain store demand is lost to the competition. If too much TST03-A is purchased, the distributor must securely discard it at the end of the week at a disposal cost of $20.20 per bottle due to its limited shelf life. Weekly demand for TST03-A is normally distributed with a mean of 500 bottles and a standard deviation of 100 bottles. How many bottles of TST03-A should the distributor order each week?
• 3) Each year, the health care products distributor purchases 1000 cases of private label cough syrup from its supplier. The cost to place an order is $60, the lead time is 10 days (there are 365 operating days in a year), and the annual inventory carrying charge is 25%. The supplier has the following price schedule:

If an incremental quantity discount is in effect, what should the order quantity and associated total costs be? What is the average price paid per case at this order quantity?