please answer in 30 mins. and only if you are sure. Everbright, a light bulb firm, faces both uncertain demand and supply, which can be modeled by normal distributions. Answer the following questions.For a typical 2-week (10-workday) period, daily demand in units is recorded as follows:10152022182525161821For the past 10 deliveries, the following pattern of lead times (i.e., performance cycle) in days is observed as follows:Lead Time (Days)Frequency817264524Total10Q7. What is the standard deviation of daily demand (keep two decimals)? Tip: use Excel for calculations; round only at the last step4.40

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Answered: Everbright, a light bulb firm, faces…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter11: Simulation Models

Section: Chapter Questions

Problem 47P

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Assume the demand for a companys drug Wozac during the current year is 50,000, and assume demand will grow at 5% a year. If the company builds a plant that can produce x units of Wozac per year, it will cost 16x. Each unit of Wozac is sold for 3. Each unit of Wozac produced incurs a variable production cost of 0.20. It costs 0.40 per year to operate a unit of capacity. Determine how large a Wozac plant the company should build to maximize its expected profit over the next 10 years.
Wholemark is an Internet order business that sells one popular New Year's greeting card. The cost of the paper on which the card is printed is $0.10 per card, and the cost of printing is $0.42 per card. The company receives $2.40 per card sold. Since the cards have the current year printed on them, unsold cards have no salvage value. Based on past data, the number of customers from Los Angeles is normally distributed with a mean of 2,500 and a standard deviation of 600. What is the optimal production quantity for the card for Los Angeles, if Wholemark only makes a one-time production for this area? Round to the nearest integer.
John buys goat milk at a cost of $5 per gallon from a local dairy and sells it for $8 per gallon in its store. The dairy will buy back any milk that is unsold at the end of the day for $2 per gallon. Each day John must determine how many gallons to order. Past sales have ranged between 15 and 18 gallons per day, according to the following demand pattern.Demand:15161718Number of days demand occurred:2486Assume that demand will be within this range in future.(a) What are the possible actions and states?(b) Determine the daily profit (rewards) and show on a reward table.(c) Using each of the following criteria, determine John’s best action.- Maximin- Maximax- Expected value(d) Construct the regret (opportunity cost) matrix and using minimax regret criteria determine John’s best action.
Weekly demand for Lego at a Wal-Mart store is normally distributed with a mean of 2,500 boxes and a standard deviation of 500. Demand is assumed to be stationary and the mean demand is used as forecast. Each order costs Wal-Mart $145 and holding cost per box per year is estimated at $1.5. Lead time is 2 weeks and the store manager has decided to review inventory every 4 weeks. (Assume a periodic review policy) a. What is safety stock requirement for a service level of 90%? b. What is the order-up-to level? c. What is the total annual variable cost?
A manager must set up inventory ordering systems for two new production items, P34 and P35.P34 can be ordered at any time, but P35 can be ordered only once every four weeks. The companyoperates 50 weeks a year, and the weekly usage rates for both items are normally distributed. Themanager has gathered the following information about the items.Item P34 Item P35Average weekly demand 60 units 70 unitsStandard deviation 4 units per week 5 units per weekUnit cost $15 $20Annual holding cost 30% 30%Ordering cost $70 $30Lead time 2 weeks 2 weeksAcceptable stockout risk 2.5% 2.5%a. When should the manager reorder each item?b. Compute the order quantity for P34.c. Compute the order quantity for P35 if 110 units are on hand at the time the order is placed.
Hayes Electronics stocks and sells a particular brand of personal computer. It costs the firm$450 each time it places an order with the manufacturer for the personal computers. The costof carrying one PC in inventory for a year is $170. The store manager estimates that total annualdemand for the computers will be 1,200 units, with a constant demand rate throughout theyear. Orders are received within minutes after placement from a local warehouse maintainedby the manufacturer. The store policy is never to have stockouts of the PCs. The store is openfor business every day of the year except Christmas Day. Determine The optimal time between orders (in working days)
Hayes Electronics stocks and sells a particular brand of personal computer. It costs the firm$450 each time it places an order with the manufacturer for the personal computers. The costof carrying one PC in inventory for a year is $170. The store manager estimates that total annualdemand for the computers will be 1,200 units, with a constant demand rate throughout theyear. Orders are received within minutes after placement from a local warehouse maintainedby the manufacturer. The store policy is never to have stockouts of the PCs. The store is openfor business every day of the year except Christmas Day. Determine The optimal number of orders per year
Hayes Electronics stocks and sells a particular brand of personal computer. It costs the firm$450 each time it places an order with the manufacturer for the personal computers. The costof carrying one PC in inventory for a year is $170. The store manager estimates that total annualdemand for the computers will be 1,200 units, with a constant demand rate throughout theyear. Orders are received within minutes after placement from a local warehouse maintainedby the manufacturer. The store policy is never to have stockouts of the PCs. The store is openfor business every day of the year except Christmas Day. Determine The optimal order quantity per order
A company uses the newsvendor model to manage its inventories and faces normallydistributed demand with a coefficient of variation of 0.75. The company decides toorder a quantity that exactly equals the mean of its demand forecast. Which of the following is true regarding this company’s performance measures? a. There is a .50 probability that there is enough inventory to serve all demand.b. Expected inventory equals 50 percent of the mean of the demand forecast.c. The stockout probability is .25.d. Expected inventory is 0.
A retailer uses a periodic review order-up-to model to control the inventory of one of its high volume products. Average demand is 2580 units per week with a standard deviation of 1270. The review period is 5 weeks, the lead time is 11 weeks, and the safety factor used is 0.61. How many stockouts should the retailer expect for this product next year?
Brenda opened a pool and spa store in a lively shopping mall and finds business to be booming but she often stocks out of key items customers want. The 28-ounce bottle of Super Algaecide (SA) is a high margin SKU, but it stocks out frequently. Ten SA bottles come in each box, and she orders boxes from a vendor 160 miles away. Brenda is busy running the store and seldom has time to review store inventory status and order the right quantity at the right time. She collected the following data: Demand = 10 boxes per week Store open = 48 weeks/year Order cost = $36/order Lead-time = 5 weeks Item cost = $72/box Std. deviation in weekly demand = 6 Inventory-holding cost = 25 percent per year Service level = 90 percent Brenda wants to consider setting up a fixed-period inventory system for the 28-ounce bottle of Super Algaecide (SA) SKU. At the beginning of the current week, D. J. Kole, the materials manager, checked the inventory level and found 80 units on-hand. There were no…
Brenda opened a pool and spa store in a lively shopping mall and finds business to be booming but she often stocks out of key items customers want. The 28-ounce bottle of Super Algaecide (SA) is a high margin SKU, but it stocks out frequently. Ten SA bottles come in each box, and she orders boxes from a vendor 160 miles away. Brenda is busy running the store and seldom has time to review store inventory status and order the right quantity at the right time. She collected the following data: Demand = 10 boxes per weekStore open 48 weeks/yearOrder cost = $40/orderLead-time = 4 weeksItem cost = $80/boxStd. deviation in weekly demand = 6Inventory holding cost = 15% per yearService level = 90% Brenda wants to consider setting up a fixed-period inventory system for the 28-ounce bottle of Super Algaecide (SA) SKU. At the beginning of the current week, D. J. Kole, the materials manager, checked the inventory level and found 55 units on-hand. There were no scheduled receipts, and 25 units…

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