A firm experiences demand with a mean of 100 units perday. Lead time demand is normally distributed, with a meanof 1,000 units and a standard deviation of 200 units. It costs$6 to hold one unit for one year. If the firm wants to meet90% of all demand on time, what will be the annual cost ofholding safety stock? (Assume that each order costs $50.)

A firm experiences demand with a mean of 100 units perday. Lead time demand is normally distributed, with a meanof 1,000 units and a standard deviation of 200 units. It costs$6 to hold one unit for one year. If the firm wants to meet90% of all demand on time, what will be the annual cost ofholding safety stock? (Assume that each order costs $50.)

Name: A firm experiences demand with a mean of 100 units perday. Lead time d
Uploaded: 2024-03-20T06:57:05.000Z
Channel: Bartleby
Description: A firm experiences demand with a mean of 100 units perday. Lead time demand is normally distributed, with a meanof 1,000 units and a standard deviation of 200 units. It costs$6 to hold one unit for one year. If the firm wants to meet90% of all demand

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter10: Introduction To Simulation Modeling

Section10.4: Simulation With Built-in Excel Tools

Problem 13P

See similar textbooks

Similar questions

An electronics retailer sells laptops at a steady rate of 7,500 per quarter. It costs the manufacturer $350 tomake each laptop, and they charge $400/laptop to the retailer. The manufacturer produces the laptop at asteady rate that matches demand, and incurs a fixed cost of $2,800 to fulfill each retail order. Both theretailer and the manufacturer have an annual holding cost percentage of 20%. The retailer places 10orders with the laptop manufacturer each quarter (which it determined from an EOQ calculation). Whatare the retailer’s and manufacturer’s costs under this current setup, as well as the total supply chain cost?
An electronics retailer sells laptops at a steady rate of 7,500 per quarter. It costs the manufacturer $350 tomake each laptop, and they charge $400/laptop to the retailer. The manufacturer produces the laptop at asteady rate that matches demand, and incurs a fixed cost of $2,800 to fulfill each retail order. Both theretailer and the manufacturer have an annual holding cost percentage of 20%. The retailer places 10orders with the laptop manufacturer each quarter (which it determined from an EOQ calculation). Whatare the retailer’s and manufacturer’s costs under this current setup, as well as the total supply chain cost?What quantity discount should the manufacturer offer the retailer in order to minimize the total supplychain costs? Under this quantity discount, what are the new retailer and manufacturer costs? Does theretailer choose to use the quantity discount? PLEASE SHOW ALL CALUCALTIONS/EXCEL MODEL
Please do not give solution in image format thanku Deltic sells this component for 55 per unit with a 4-month delivery lead time. Assume Deltic covers all transportation and related processing until delivery. TCX’s demand forecast for the upcoming selling season (12 months) is a normal distribution with mean 13500 and standard deviation 3736,4 . TCX sells each unit, after integrating their proprietary software, for 135. Assume that TCX uses a holding cost rate of 25 %, and any leftover units can be sold for 30 on average. Due to the long lead time and high minimum order quantity required, TCX is planning on a single order from Deltic to meet their needs in the next year. How many of these components should TCX order? Calculate the resulting expected annual profits for TCX.
Parasol Systems sells motherboards for personal computers. For quantities upthrough 25, the firm charges $350 per board; for quantities between 26 and 50,it charges $315 for each board purchased beyond 25; and it charges $285 eachfor the additional quantities over 50. A large communications firm expects torequire these motherboards for the next 10 years at a rate of at least 140 peryear. Order setup costs are $30 and holding costs are based on an 18 percentannual interest rate. What should be the size of the standing order?
A firm experiences demand with a mean of 100 units per day. Lead time demand is normally distributed with mean 1000 units and standard deviation 200 units. It costs $6 to hold one unit for one year. If the firm wants to meet 90% of all demand on time, what is the expected annual cost of holding safety stock? Assume that each order costs $50.
Rocky Mountain Tire Centre sells 20,000 tires of a particular type per year. The ordering cost for each order is $40, and the holding cost is 20% of the purchase price of the tires per year. The purchase price is $20. per tire if fewer than 500 tires are ordered, $18. Per tire if more than 500 but fewer than 1,000 tires are ordered and $17. per tire if 1,000 or more tires are ordered. Quantity Unit Price 1-499 $20. 500-999 $18. 1000 & over $17 Based on available information, lead time demand for CD-ROM drives averages 50 units (normally distributed), with a standard deviation of 5 drives. Management wants a 97% service level. What value of Z should be applied? How many drives should be carried as safety stock?
The home appliance department of a large department store is using inventory models to controlthe replenishment of a particular model of Microwave ovens. The daily demand follows anormal distribution with a mean of 150 units and standard deviation of 16 units. The store pays$100 for each oven. Fixed costs of replenishment are $28. The accounting departmentrecommends a 20% annual holding cost rate. Assume that the average lead time is 5 days with astandard deviation of 1 day. Assume 365 days a year.Part A: What is the EOQ?Part B: What is the reorder point if the maximum chance of 5% of stock out (i.e. 95% servicelevel) is desired?Part C: What is the reorder point if a fill rate of 99% is required?Part D: Suppose management wants to simplify the process by setting the reorder point to“1000” units. Based on this policy, what is the implied chance of stock out?
A wholesaler has a steady demand for 50 items of a given product each month.The purchase cost of each item is 6 MU and the holding cost for this item is estimated tobe 20% of the stock value per annum. Every order placed by the wholesaler cost 10 MUin administration charges regardless of the number ordered? Please mention formulas and do it in detail so I can understand.
A component used in a manufacturing facility is ordered from an outside supplier.Because the component is used in a variety of end products, the demand is high. Estimated demand (in thousands) over the next 10 weeks isWeek 1 2 3 4 5 6 7 8 9 10Demand 22 34 32 12 8 44 54 16 76 30The components cost 65 cents each and the interest rate used to compute the holding cost is 0.5 percent per week. The fixed order cost is estimated to be $200. (Hint:Express h as the holding cost per thousand units.)d. Which method resulted in the lowest-cost policy for this problem?
A component used in a manufacturing facility is ordered from an outside supplier.Because the component is used in a variety of end products, the demand is high. Estimated demand (in thousands) over the next 10 weeks isWeek 1 2 3 4 5 6 7 8 9 10Demand 22 34 32 12 8 44 54 16 76 30The components cost 65 cents each and the interest rate used to compute the holding cost is 0.5 percent per week. The fixed order cost is estimated to be $200. (Hint:Express h as the holding cost per thousand units.)a. What ordering policy is recommended by the Silver–Meal heuristic?
A component used in a manufacturing facility is ordered from an outside supplier.Because the component is used in a variety of end products, the demand is high. Estimated demand (in thousands) over the next 10 weeks isWeek 1 2 3 4 5 6 7 8 9 10Demand 22 34 32 12 8 44 54 16 76 30The components cost 65 cents each and the interest rate used to compute the holding cost is 0.5 percent per week. The fixed order cost is estimated to be $200. (Hint:Express h as the holding cost per thousand units.)c. What ordering policy is recommended by the least unit cost heuristic?
A component used in a manufacturing facility is ordered from an outside supplier.Because the component is used in a variety of end products, the demand is high. Estimated demand (in thousands) over the next 10 weeks isWeek 1 2 3 4 5 6 7 8 9 10Demand 22 34 32 12 8 44 54 16 76 30The components cost 65 cents each and the interest rate used to compute the holding cost is 0.5 percent per week. The fixed order cost is estimated to be $200. (Hint:Express h as the holding cost per thousand units.)b. What ordering policy is recommended by the part period balancing heuristic?