8 Ronnie Sharpe runs Boro's Better Printing (BBP). Though most of his paper can beordered using a fixed interval, variable quantity inventory system, he has decided tohandle the white 8%x11 copy paper using a fixed quantity, variable interval system.Ronnie operates 300 days per year and uses an average of 7 boxes of white paperper day with a standard deviation of 2 boxes per day. The time between placing andreceiving an order is 2 days. Ronnie wants to maintain a 90% lead time service level.Determine the average demand during lead time. (Round to two digits. eg. xx.xx)What is the appropriate value of z for this service level? (Round to three digits. e.g.,z.zzz)What is the appropriate value for safety stock given this service level? (Round totwo places, e.g. xXx.xx)What is the appropriate re-order point in this scenario? (round to two digits, e.g.rrr.r)

Answered: Determine the average demand during…

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...

See similar textbooks

Similar questions

Race One Motors is an Indonesian car manufacturer. At its largest manufacturing facility, in Jakarta, the company produces subcomponents at a rate of 300 per day,and it uses these subcomponents at a rate of 12,500 per year (of 250 working days). Holding costs are $2 per item per year, and ordering (setup) costs are $30 per order. d) What percentage of time will the facility be producingcomponents? e) What is the annual cost of ordering and holding inventory?
The Metropolitan Book Company purchases paper from the Atlantic Paper Company. Metropolitanproduces magazines and paperbacks that require 1,215,000 pounds of paper per year. Thecost per order for the company is $1,200; the cost of holding 1 pound of paper in inventory is$0.08 per year. Determine The optimal number of orders per year
A hospital orders surgical supplies using a fixed order interval system. Suppose that just prior to ordering, a check of rolls of gauze bandages shows that there are 40 currently on hand. Suppose also that these rolls have a daily usage that is approximately normal with a mean of 9 rolls and a standard deviation of 4 rolls. Lead time is 4 days and the desired service level is 98 percent. The order interval is 12 days. 1. What would have been the desired service level if an order quantity of 142 rolls were placed when the stock on hand is 30 rolls? (Assume: amount on order and backorder is zero). * 2. How many units would be the safety stock? *
Bulldogs Inc. expects to use 96,000 litters of paint annually costing P12 per litter. Inventory carrying cost is equal to 25% of the purchase price. The lead time for placing the order is 1 week, and Bulldogs Inc. holds 4,800 litters of paint as safety stock. The company’s usage of inventory is at a constant rate. If the company orders 4,000 litters of paint per order, what is the cost of carrying inventory?
Inc. expects to use 96,000 litters of paint annually costing P12 per litter. Inventory carrying cost is equal to 25% of the purchase price. The lead time for placing the order is 1 week, an Inc. holds 4,800 litters of paint as safety stock. The company’s usage of inventory is at a constant rate. If the company orders 4,000 litters of paint per order, what is the cost of carrying inventory?
Top Hatz Inc. makes a variety of ski hats. The average demand for the ‘Nordic Dream’ hat is 125 per week and production is capable of producing 500 hats per week. Set-up is $245. The value of the finished hats is $25 and the annual holding cost per item is 20% of its value. What is the production order quantity? What is the production time for each cycle? What is the average time between orders, assuming there are 350 days available per year? Top Hatz Inc.’s average demand for the ‘Nordic Dream’ hat increases to 350per week; its production capability improves to 700 hats per week; set-up cost falls to $95; and the annual holding cost per item increases to 35% of its value. What is the effect on POQ, production time for each cycle and average time between orders?
The Wallace Stationary Company purchases paper from the Seaboard Paper Company. Wallace produces stationary that require 1,415,000 sq. yards of stationary per year. The cost per order for the company is $2,200; the cost of holding 1 yard of paper in inventory is $0.08 per year. Determine the following: a. Economic order quantity b. Minimum total annual cost c. Optimal number of orders per year d. Optimal time between orders
Race One Motors is an Indonesian car manufacturer. At its largest manufacturing facility, in Jakarta, the company produces subcomponents at a rate of 305 per day, and it uses these subcomponents at a rate of 12,500 per year (of 250 working days). Holding costs are $2 per item per year, and ordering costs are $32 per order. a) What is the economic production quantity?b) How many production runs per year will be made?c) What will be the maximum inventory level?d) What percentage of time will the facility be producing components?e) What is the annual cost of ordering and holding inventory?
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?
FINDING THE OPTIMAL ORDER SIZE AT SHARP, INC. Sharp, Inc., a company that markets painless hypodermic needles to hospitals, would like to reduce itsinventory cost by determining the optimal number of hypodermic needles to obtain per order.APPROACH c The annual demand is 1,000 units; the setup or ordering cost is $10 per order; and theholding cost per unit per year is $.50.
A local gas station is open 7 days per week, 365 days per year. Sales of 10W40 grade premium oil average 10 cans per day with a standard deviation of 4 canes. Inventory holding costs are 1.5$ per can per year. Ordering cost is $20 per order. Lead time is 8 days. In case of stockout, the motorist drives away and the sale is lost. So, the service station requires a service level of 95 %. If the station uses a fixed-quantity inventory management system, what would be the order quantity, the safety stock and the reorder level? If the station uses a fixed-review-period management system with 28 days review interval, what would be the order quantity if the inventory level is 55 cans at the moment of ordering?
Peach Company uses 800 units of a product per year on a continuous basis. The product has a Fixed Cost of $50 per order, and its carrying cost is $2 per unit per year. It takes 5 days to receive a shipment after an order is placed, and the firm wishes to hold 10 days’ usage in inventory as a safety stock. Show Computations and Explanations. The EOQ = 200 Units The Average Level of Inventory = 121.92 Units The Reorder Point = 33 Units A. Indicate if the Variable Change if the firm does not hold the Safety Stock. Variable: Reorder Point (Format: Change or Do not Change) B. Indicate if the Variable Change if the firm does not hold the Safety Stock. Variable: Economic Order Quantity (Format: Change or Do not Change)

SEE MORE QUESTIONS

Recommended textbooks for you

Practical Management Science

Operations Management

ISBN:

9781337406659

Author:

WINSTON, Wayne L.

Publisher:

Cengage,

Operations Management

ISBN:

9781259667473

Author:

William J Stevenson

Publisher:

McGraw-Hill Education

Operations and Supply Chain Management (Mcgraw-hi…

Operations Management

ISBN:

9781259666100

Author:

F. Robert Jacobs, Richard B Chase

Publisher:

McGraw-Hill Education

Practical Management Science

Operations Management

ISBN:

9781337406659

Author:

WINSTON, Wayne L.

Publisher:

Cengage,

Operations Management

ISBN:

9781259667473

Author:

William J Stevenson

Publisher:

McGraw-Hill Education

Operations and Supply Chain Management (Mcgraw-hi…

Operations Management

ISBN:

9781259666100

Author:

F. Robert Jacobs, Richard B Chase

Publisher:

McGraw-Hill Education

Business in Action

Operations Management

ISBN:

9780135198100

Author:

BOVEE

Publisher:

PEARSON CO

Purchasing and Supply Chain Management

Operations Management

ISBN:

9781285869681

Author:

Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:

Cengage Learning

Production and Operations Analysis, Seventh Editi…

Operations Management

ISBN:

9781478623069

Author:

Steven Nahmias, Tava Lennon Olsen

Publisher:

Waveland Press, Inc.

SEE MORE TEXTBOOKS

Determine the average demand during lead time. (Round to two digits. eg. xx.xx) What is the appropriate value of z for this service level? (Round to three digits. e.g z.zzz) What is the appropriate value for safety stock given this service level? (Round to two places, e.g. xXx.xx)