The case is based on the inventory situation faced by Arome Bakery, one of the leading bakery chains in Hong Kong. Sarah Cheng, assistant operations manager, wants to increase the bakery's competitiveness by improving its operation. A key goal is to reduce the number of unsold products that are returned to the central baking factory for disposal. Sarah is looking for a systematic method to determine the optimum order quantity, so as to minimize product wastage while balancing stock-out risk.

Students' Worksheet for ST4.