3) A mgr. must set up an invty system for two (2) new production items, P34 & P35. P34 can be ordered at any time, butP35 can only be ordered once every 4 weeks. The co. operates 50 weeks a year and the weekly usage rates for both itemsare normally distributed. The mgr. has gathered the following information about the items:Item P34Item P35Average wkly demandStandard deviation60 units70 units4 units per wk$155 units per wk$20Unit costAnnual Holding cost40%40%Ordering costLead time$70$302 weeks2 weeksAcceptable stockout risk5%5%a) When should the manager reorder each item?b) Compute the order quantity for P34c) Compute the reorder point for P35 if 110 units are on hand at the time the order is placed.

Name: 3) A mgr. must set up an invty system for two (2) new production item
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Description: 3) A mgr. must set up an invty system for two (2) new production items, P34 & P35. P34 can be ordered at any time, butP35 can only be ordered once every 4 weeks. The co. operates 50 weeks a year and the weekly usage rates for both itemsare normally

Given: The company operates for 50 weeks per year. The following information is given: Item P34…

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3) A mgr. must set up an invty system for two (2) new production items, P34 & P35. P34 can be ordered at any time, but P35 can only be ordered once every 4 weeks. The co. operates 50 weeks a year and the weekly usage rates for both items are normally distributed. The mgr. has gathered the following information about the items: Item P34 60 units 4 units per wk $15 Item P35 Average wkly demand Standard deviation Unit cost 70 units 5 units per wk $20 Annual Holding cost Ordering cost Lead time 40% 40% $70 2 weeks $30 2 weeks Acceptable stockout risk 5% 5% a) When should the manager reorder each item? b) Compute the order quantity for P34 Compute the reorder point for P35 if 110 units are on hand at the time the order is placed. c)

3) A mgr. must set up an invty system for two (2) new production items, P34 & P35. P34 can be ordered at any time, but P35 can only be ordered once every 4 weeks. The co. operates 50 weeks a year and the weekly usage rates for both items are normally distributed. The mgr. has gathered the following information about the items: Item P34 60 units 4 units per wk $15 Item P35 Average wkly demand Standard deviation Unit cost 70 units 5 units per wk $20 Annual Holding cost Ordering cost Lead time 40% 40% $70 2 weeks $30 2 weeks Acceptable stockout risk 5% 5% a) When should the manager reorder each item? b) Compute the order quantity for P34 Compute the reorder point for P35 if 110 units are on hand at the time the order is placed. c)

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 33P: Assume the demand for a companys drug Wozac during the current year is 50,000, and assume demand...

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