:6-38 North Manufacturing has a demand for 1,000 pumpseach year.CHAPTER 6 INVENTORY CON230aManufacturing $40 to place an order, and the carry-ing cost is 25% of the unit cost. If pumps are orderedin quantities of 200, North Manufacturing can get a3% discount on the cost of the pumps. Should NorthManufacturing order 200 pumps at a time and takethe 3% discount?The cost of a pump is $50. It costs North6-39 Linda Lechner is in charge of maintaining hospitalsupplies at General Hospital. During the past year,the mean lead time demand for bandage BX-5 was60. Furthermore, the standard deviation for BX-5was 7. Linda would like to maintain a 90% servicelevel. What safety stock level do you recommend forВХ-5?brtQUA31-199X200:6-40 Linda Lechner has just been severely chastised forher inventory policy. (See Problem 6-39.) Sue Sur-rowski, her boss, believes that the service levelshould be either 95% or 98%. Compute the safetystock levels for a 95% and a 98% service level.5006-43Linda knows that the carrying cost of BX-5 is 50cents per unit per year. Compute the carrying costthat is associated with a 90%, a 95%, and a 98% ser-vice level.6-41 Ralph Janaro simply does not have time to ana-lyze all of the items in his company's inventory. Asa young manager, he has more important things todo. The following is a table of six items in inventoryalong with the unit cost and the demand in units.(a) Find the total amount spent on each item duringthe year. What is the total investment for all of3dthese?(b) Find the percentage of the total investment in in-ventory that is spent on each item.93

Question
Asked Nov 27, 2019
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6-39

:6-38 North Manufacturing has a demand for 1,000 pumps
each year.
CHAPTER 6 INVENTORY CON
230
a
Manufacturing $40 to place an order, and the carry-
ing cost is 25% of the unit cost. If pumps are ordered
in quantities of 200, North Manufacturing can get a
3% discount on the cost of the pumps. Should North
Manufacturing order 200 pumps at a time and take
the 3% discount?
The cost of a pump is $50. It costs North
6-39 Linda Lechner is in charge of maintaining hospital
supplies at General Hospital. During the past year,
the mean lead time demand for bandage BX-5 was
60. Furthermore, the standard deviation for BX-5
was 7. Linda would like to maintain a 90% service
level. What safety stock level do you recommend for
ВХ-5?
brt
QUA
31-199
X200
:6-40 Linda Lechner has just been severely chastised for
her inventory policy. (See Problem 6-39.) Sue Sur-
rowski, her boss, believes that the service level
should be either 95% or 98%. Compute the safety
stock levels for a 95% and a 98% service level.
500
6-43
Linda knows that the carrying cost of BX-5 is 50
cents per unit per year. Compute the carrying cost
that is associated with a 90%, a 95%, and a 98% ser-
vice level.
6-41 Ralph Janaro simply does not have time to ana-
lyze all of the items in his company's inventory. As
a young manager, he has more important things to
do. The following is a table of six items in inventory
along with the unit cost and the demand in units.
(a) Find the total amount spent on each item during
the year. What is the total investment for all of
3d
these?
(b) Find the percentage of the total investment in in-
ventory that is spent on each item.
93
help_outline

Image Transcriptionclose

:6-38 North Manufacturing has a demand for 1,000 pumps each year. CHAPTER 6 INVENTORY CON 230 a Manufacturing $40 to place an order, and the carry- ing cost is 25% of the unit cost. If pumps are ordered in quantities of 200, North Manufacturing can get a 3% discount on the cost of the pumps. Should North Manufacturing order 200 pumps at a time and take the 3% discount? The cost of a pump is $50. It costs North 6-39 Linda Lechner is in charge of maintaining hospital supplies at General Hospital. During the past year, the mean lead time demand for bandage BX-5 was 60. Furthermore, the standard deviation for BX-5 was 7. Linda would like to maintain a 90% service level. What safety stock level do you recommend for ВХ-5? brt QUA 31-199 X200 :6-40 Linda Lechner has just been severely chastised for her inventory policy. (See Problem 6-39.) Sue Sur- rowski, her boss, believes that the service level should be either 95% or 98%. Compute the safety stock levels for a 95% and a 98% service level. 500 6-43 Linda knows that the carrying cost of BX-5 is 50 cents per unit per year. Compute the carrying cost that is associated with a 90%, a 95%, and a 98% ser- vice level. 6-41 Ralph Janaro simply does not have time to ana- lyze all of the items in his company's inventory. As a young manager, he has more important things to do. The following is a table of six items in inventory along with the unit cost and the demand in units. (a) Find the total amount spent on each item during the year. What is the total investment for all of 3d these? (b) Find the percentage of the total investment in in- ventory that is spent on each item. 93

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Expert Answer

Step 1

To determine question no. 6-39, where we need to find out safety stock level for BX-5.

:6-38 North Manufacturing has a demand for 1,000 pumps
cach year. The cost of a pump is $50. It costs North
Manufacturing $40 to place an order, and the carry
ing cost is 25% of the unit cost. If pumps are ordered
in quantities of 200, North Manufacturing can get a
3% discount on the cost of the pumps. Should North
Manufacturing order 200 pumps at a time and take
the 3% discount?
CHAPTER 6 INVENTORY CONTROE
:6-39 Linda Lechner is in charge of maintaining hospital
supplies at General Hospital. During the past year,
the mean lead time demand for bandage BX-5 was
60. Furthermore, the standard deviation for BX-5
was 7. Linda would like to maintain a 90% service
level. What safety stock level do you recommend for
BX-5?
61-1
:6-40 Linda Lechner has just been severely chastised for
her inventory policy. (See Problem 6-39.) Sue Sur-
rowski, her boss, believes that the service level
0should be either 95% or 98%. Compute the safety
stock levels for a 95% and a 98% service level. 6-43
Linda knows that the carrying cost of BX-5 is 50
cents per unit per year. Compute the carrying cost
that is associated with a 90%, a 95%, and a 98% ser-
000
00
vice level.
:6-41 Ralph Janaro simply does not have time to ana-
lyze all of the items in his company's inventory. As
a young manager, he has more important things to
do. The following is a table of six items in inventory
along with the unit cost and the demand in units.
(a) Find the total amount spent on each item during
the year. What is the total investment for all of
these?
(b) Find the percentage of the total investment in in-
ventory that 1s spent on each item.
help_outline

Image Transcriptionclose

:6-38 North Manufacturing has a demand for 1,000 pumps cach year. The cost of a pump is $50. It costs North Manufacturing $40 to place an order, and the carry ing cost is 25% of the unit cost. If pumps are ordered in quantities of 200, North Manufacturing can get a 3% discount on the cost of the pumps. Should North Manufacturing order 200 pumps at a time and take the 3% discount? CHAPTER 6 INVENTORY CONTROE :6-39 Linda Lechner is in charge of maintaining hospital supplies at General Hospital. During the past year, the mean lead time demand for bandage BX-5 was 60. Furthermore, the standard deviation for BX-5 was 7. Linda would like to maintain a 90% service level. What safety stock level do you recommend for BX-5? 61-1 :6-40 Linda Lechner has just been severely chastised for her inventory policy. (See Problem 6-39.) Sue Sur- rowski, her boss, believes that the service level 0should be either 95% or 98%. Compute the safety stock levels for a 95% and a 98% service level. 6-43 Linda knows that the carrying cost of BX-5 is 50 cents per unit per year. Compute the carrying cost that is associated with a 90%, a 95%, and a 98% ser- 000 00 vice level. :6-41 Ralph Janaro simply does not have time to ana- lyze all of the items in his company's inventory. As a young manager, he has more important things to do. The following is a table of six items in inventory along with the unit cost and the demand in units. (a) Find the total amount spent on each item during the year. What is the total investment for all of these? (b) Find the percentage of the total investment in in- ventory that 1s spent on each item.

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Step 2

At first it is important to know the meaning of safety stock level. There can be situations where stock would be required for emergency purpose, so that it saves us from running out of the product. For example, in case of breakdown of machinery, any natural disaster which could affect the product flows from supplier, etc.

Step 3

Data available for calculation:

Mean Lead Time Demand= 60

St...

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