solve all parts A part is demanded at the rate of 430 per week. The part is purchased from a supplier in Asia, and the leadtime is 3 weeks. The standard deviation of demand during the lead time is 28 units. If the company wants tohave a service level of 90%, how much safety stock should the company hold for this part? If the opportunitycost of capital for the company is estimated to be 15% and the part cost $40, what is the annualized cost of thesafety stock required to achieve the desired service level?Click the icon to view the table for the z-values for the given probabilities.The safety stock is units. (Enter your response rounded up to the next whole number.)The annualized cost of safety stock is $. (Enter your response rounded to the nearest dollar.)

Given data: Part demanded per week = 430 units Lead time = 3 weeks S.d of demand during lead time =…

Answered: A part is demanded at the rate of 430…

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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The Rahway, New Jersey, plant of Metalcase, a manufacturer of office furniture, produces metaldesks at a rate of 200 per month. Each desk requires 40 Phillips head metal screws purchasedfrom a supplier in North Carolina. The screws cost 3 cents each. Fixed delivery charges and costsof receiving and storing shipments of the screws amount to about $100 per shipment, independently of the size of the shipment. The firm uses a 25 percent interest rate to determineholding costs. Metalcase would like to establish a standing order with the supplier and is considering several alternatives. What standing order size should they use?
A warehouse checks inventory and places an order from a supplier for a particular product once a month. The monthly demand for the product is independent and normally distributed with a mean of 500 and a standard deviation of 100. If the warehouse targets a 90% service level for this product, and the supplier’s lead time is one month, how much safety stock should be held? PLEASE SHOW CALCULATIONS/EXCEL WITH FORMULAS
The bookstore at Tech purchases jackets emblazoned withthe school name and logo from a vendor. The vendor sellsthe jackets to the store for $38 apiece. The cost to the bookstore for placing an order is $120, and the annual car-rying cost is 25% of the cost of a jacket. The bookstore manager estimates that 1700 jackets will be sold during theyear. The vendor has offered the bookstore the followingvolume discount schedule: Order Size Discount1–299 0%300–499 2%500–799 4%800 5% What is the bookstore’s optimal order quantity, given thisquantity discount information?
A firm incurs a fixed order cost of $10 per order and 20 percent annual holdingcosts. It purchases an item for $2.50 and sells 1000 units per year. It is offered a 5 percentdiscount if it purchases 800 units or more. How much does it save each year (includingpurchasing, ordering, and holding costs) if it purchases enough units to get the discount?
Semicon is a start-up company that produces semiconductors for a variety ofapplications. The process of burning in the circuits requires large amounts ofnitric acid, which has a shelf life of only three months. Semicon estimates that itwill need between 1,000 and 3,000 gallons of acid for the next three-monthperiod and assumes that all values in this interval are equally likely. The acidcosts them $150 per gallon. The company assumes a 30 percent annual interestrate for the money it has invested in inventory, and the acid costs the company $35a gallon to store. (Assume that all inventory costs are attached to the end of thethree-month period.) Acid that is left over at the end of the three-month periodcosts $75 per gallon to dispose of. If the company runs out of acid during thethree-month period, it can purchase emergency supplies quickly at a price of$600 per gallon.a. How many gallons of nitric acid should Semicon purchase? Experience with themarketplace later shows that the demand…
Letherin Hides is a company that makes boots specifically targeting college students. Forecasts of sales for the next year are 200 in the summer, 450 in the fall, and 500 in the winter. Accessories that are used on the boots are purchased from a supplier for $31.66. The cost of capital is estimated to be 24% per year (or 6% per quarter); thus, the holding cost per item is 0.06(31.66)=$1.9 per quarter (rounded figure). Letherin Hides hires freelance art designers at part-time to craft designs during the summer, and they earn $6.00 per hour. In the fall, labor is more difficult to keep, and the owner must pay $6.50 per hour to retain qualified help. Because of the high demand for part-time help during the winter holiday season, labor rates are higher in the winter, and workers earn $7.75 per hour. Each boot design takes 2 hours to complete. How should production be planned over the three quarters to minimize the combined production and inventory holding costs? The table below provides…
The demand faced by CBA company each week is estimated to be normally distributed with a mean of 1000 units and a standard deviation of 250. Lead time of delivery is fixed at 2 weeks. Ordering cost is $800 per order, variable cost per unit ordered is $4, the inventory carrying charge is 20% per year. Assume 50 weeks per year. CBA would like the probability to satisfy customer demand be 95%. Find the (Q,R) policy. If the leadtime is 2 weeks and a standard deviation of 1 week. Find the (Q,R) policy. What is the impact of the weekly demand’s standard deviation on the (Q,R) policy?
I need a detailed explanation on how to solve this problem: A paint shop implements an inventory policy on its stock of white paint, which costs the store $6 per can. Monthly demand for cans of white paint is normal with mean 28 and standard deviation 8. The replenishment lead time is 14 weeks. Excess demand is backordered, but costs $10 per back ordered can in labor and loss of goodwill. There is a fixed cost of $15 per order, and the holding cost is based on 30% interest rate per annum. In your computations, assume 4 weeks per month. - Write down the model name and parameters. - What are the optimal lot size and reorder points for white paint (include the formulas)? - What is the optimal safety stock (include the formula)? *** Suppose the paint shop from the above problem adopts a service level policy. - What are the optimal lot size and reorder points for white paint, such that 90% of the cycles are filled without backordering (include all formulas)? - What is the fill rate…
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Consider a hardware supply warehouse that is contractually obligated to deliver 1000units a specialized fastener to a local manufaturing company each week. Each time thewarehouse places an order for these items from its supplier, an ordering and transporationfee off $20 is charged to the warehouse. The warehouse pays $1.00 for each fastener andcharges the local firm $5.00 for each fastener. Annual holding cosst iss 25% off inventoryvalue, or $0.25 per year. The warehouse manager would like to know how much to orderwhen inventory gets to zero.Assume that the warehouse works 50 weeks/year.
A company has a demand for 25,750 units annually. The holding cost is 33% of the item cost which is $10.00. The ordering or set-up cost is $250.00 per order and the lead time is 5 days. Assume that there are 350 days per year Suppose a price break of $50 per order is offered for purchase quantities of 2,000 or greater. a) Would you take advantage of this based on the economics of the two offers? b) How much is the difference in the annual cost between these two options? c) What is the reorder point for this inventory strategy? What is the inventory position immediately after an order is placed for the inventory strategy that you have selected?

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