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The Maju Supermarket stocks Munchies Cereal. Demand for Munchies is 4,000 boxes per year and the super market is open throughout the year. Each box costs $4 and it costs the store $60 per order of Munchies, and it costs $0.80 per box per year to keep the cereal in stock. Once an order for Munchies is placed, it takes 4 days to receive the order from a food distributor.
a. Find the optimal order quantity.
b. Find the total inventory cost associated with the optimal order quantity.
c. What is the reorder point?
d. What is the cycle time?
Circles or Pie Diagram: Circles or pie diagrams are alternative to squares. These are used for the same purpose i.e. when the values are differing widely in their magnitude
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1. Definition of decision tree, 2. Feature of decision theory problem
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Modify your formulas from (1) to compute the price at time 0 of an American put option with the same contract speci cations in the binomial model. Report the price of the American
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