12. A restaurant uses an average of 8 jars of a special sauce every day. When they place an order, thejars arrive to the restaurant in a day (lead time is 1 day). Daily usage of sauce has a standarddeviation of 3 jars. They think their demand during the lead time can be modelled with normaldistribution. The manager is willing to accept no more than a 10 percent risk of stockout duringlead time. Calculate at which level of inventory a new order needs to be placed (i.e. calculate thereorder-point(ROP)).

Daily demand (d) = 8 jarsLead Time (L) = 1 dayStandard Deviation of daily demand (σd) = 3 jars Stock…

Answered: 12. A restaurant uses an average of 8…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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Peet’s Coffees in Menlo Park, California, sells Melitta Number 101 coffee filters at afairly steady rate of about 60 boxes of filters monthly. The filters are ordered from asupplier in Trenton, New Jersey. Peet’s manager is interested in applying some inventorytheory to determine the best replenishment strategy for the filters.Peet’s pays $2.80 per box of filters and estimates that fixed costs of employee timefor placing and receiving orders amount to about $20. Peet’s uses a 22 percent annualinterest rate to compute holding costs.a. How large a standing order should Peet’s have with its supplier in Trenton, and howoften should these orders be placed?
Peet’s Coffees in Menlo Park, California, sells Melitta Number 101 coffee filters at afairly steady rate of about 60 boxes of filters monthly. The filters are ordered from asupplier in Trenton, New Jersey. Peet’s manager is interested in applying some inventorytheory to determine the best replenishment strategy for the filters.Peet’s pays $2.80 per box of filters and estimates that fixed costs of employee timefor placing and receiving orders amount to about $20. Peet’s uses a 22 percent annualinterest rate to compute holding costs.c. What are the average annual holding and fixed costs associated with these filters,assuming they adopt an optimal policy?
Inventory manager of a retail store wants to order plastic Easter eggs, demand for which is highly seasonal. Easter eggs come in a special value box (250 eggs per box). The manufacturer is located in China, so a long lead time required to receive the orders. After the order is placed, eggs will arrive just in time before the Easter Holiday. Therefore, if stocks out, the inventory manager will not be able to place a second order. The demand follows a normal distribution with a mean of 4,000 boxes and a standard deviation of 500 boxes. Each ordered special value box will cost $3 and will retail at $7. Leftover eggs will be salvaged at $2 per box after the Easter Holiday. Customer goodwill cost is estimated to be $0.934 for each lost sale. Find optimal order quantity and Expected Sold (Assume f_u(z)=0.25). Group of answer choices Cannot be calculated using the information given Q*=4,480 boxes, E[Sold]=4,000 boxes Q*=3,956 boxes, E[Sold]=4,480 boxes Q*=4,480 boxes, E[Sold]=3,956…
Customers at Joe’s Office Supply Store demand anaverage of 6,000 desks per year. Each time an order isplaced, an ordering cost of $300 is incurred. The annualholding cost for a single desk is 25% of the $200 cost of adesk. One week elapses between the placement of an orderand the arrival of the order. In parts (a)–(d), assume that noshortages are allowed.a Each time an order is placed, how many desks shouldbe ordered?b How many orders should be placed each year? c Determine the total annual costs (excluding purchas-ing costs) of meeting the customers’ demands for desks. d Determine the reorder point. If the lead time werefive weeks, what would be the reorder point? (52 weeksone year.)e How would the answers to parts (a) and (b) changeif shortages were allowed and a cost of $80 is incurredif Joe’s is short one desk for one year?
Customers at Joe’s Office Supply Store demand an -average of 6000 desks per year. Each time an order is placed, an ordering cost of $300 is incurred. The annual holding cost for a single desk is 25% of the $200 cost of a desk. One week elapses between the placement of an order and the arrival of the order. In parts a to d, assume that no shortages are allowed. a. Each time an order is placed, how many desks should be ordered? b. How many orders should be placed each year? c. Determine the total annual costs (excluding purchasing costs) of meeting the customers’ demands for desks. d. If the lead time is five weeks, what is the reorder point? (One year equals 52 weeks.) e. How do the answers to parts a and b change if shortages are allowed and a cost of $80 is incurred if Joe’s is short one desk for one year
Dunstreet's Department Store would like to develop an inventory ordering policy of a 90 percent probability of not stocking out. To illustrate your recommended procedure, use as an example the ordering policy for white percale sheets.Demand for white percale sheets is 3,400 per year. The store is open 365 days per year. Every two weeks (14 days) inventory is counted and a new order is placed. It takes 12 days for the sheets to be delivered. Standard deviation of demand for the sheets is five per day. There are currently 170 sheets on hand. How many sheets should you order?
Peet's Coffees in Menlo Park, California, sells Melitta Number 101 coffee filters at a fairly steady rate of about 60 boxes of filters monthly. The filters are ordered from a supplier in Trenton, New Jersey. Peet's manager is interested in applying some inventory theory to determine the best replenishment strategy for the filters. Peet's pays $2.80 per box of filters and estimates that fixed costs of employee time for placing and receiving orders amount to about $20. Peet's uses a 22 percent annual interest rate to compute holding costs. b. Suppose that it takes three weeks to receive a shipment. What inventory of filters should be on hand when an order is placed?
Consider pereiod review system, where orders are placed every 20 days. The firm strives to provide a 94.6% cycle service level. Demand averages 420 units per day, and the standard deviation of demand per day is 106 units. Lead time is 11 days. a. How many units of safety stock should be held? b. What should the target inventory level (order-up-to level) be? c. Suppose that it is time to review the item. There are 160 units in inventory, and there is an outstandin back order for 400 units. An order for 128 units is on the way, how many units should be ordered now?
Dunstreet’s Department Store would like to develop an inventory ordering policy of a 95 percent probability of not stocking out. To illustrate your recommended procedure, use as an example the ordering policy for white percale sheets. Demand for white percale sheets is 5,000 per year. The store is open 365 days per year. Every two weeks (14 days) inventory is counted and a new order is placed. It takes 10 days for the sheets to be delivered. Standard deviation of demand for the sheets is five per day. There are currently 150 sheets on hand. How many sheets should you order?
1. A service station uses 2500 oil filters during the course of a year, and this usage is constant throughout the year. These oil filters are purchased from a supplier 100 miles away for $15 each, and the lead time is 2 days. The holding cost per oil filter per year is $1.50 (or 10% of the unit cost) and the ordering cost is $18.75. There are 250 working days per year. The station manager wants to re-consider his decision of buying the oil filters and is considering making the oil filters in-house. He has determined that set-up cost would be $25 in machinist time and lost production time. He estimates that the cost (inclusiveof materials and labor time) of producing one oil filter would be $14.80, and that holding cost will be 10% of this cost. a) What is the station's optimal production quantity? b) If the station uses the optimal production quantity, what would be the annual total cost of inventory?
1. A service station uses 2500 oil filters during the course of a year, and this usage is constant throughout the year. These oil filters are purchased from a supplier 100 miles away for $15 each, and the lead time is 2 days. The holding cost per oil filter per year is $1.50 (or 10% of the unit cost) and the ordering cost is $18.75. There are 250 working days per year. The station manager wants to re-consider his decision of buying the oil filters and is considering making the oil filters in-house. He has determined that set-up cost would be $25 in machinist time and lost production time. He estimates that the cost (inclusive of materials and labor time) of producing one oil filter would be $14.80, and that holding cost will be 10% of this cost. a) What is the station's optimal production quantity? b) If the station uses the optimal production quantity, what would be the annual total cost of inventory?
Chicago's Hard Rock Hotel distributes a mean of 1,200 bath towels per day to guests at the pool and in their rooms. This demand is normally distributed with a standard deviation of 100 towels per day, based on occupancy. The laundry firm that has the linen contract requires a 3-day lead time. The hotel expects a 99% service level to satisfy high guest expectations. Refer to the standard normal table Z Pr(Z) 0.38 65 0.50 69 0.67 75 0.84 80 1.04 85 1.28 90 1.41 92 1.56 94 1.65 95 1.75 96 2.06 98 2.33 99 a) What is the reorder point? b) What is the safety stock? enter your response here towels (round your response to the nearest whole number).

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