For an item with an average daily demand of 70units with a standard deviation of 4 units, anaverage lead time of 8 days with a standarddeviation of 2 days, and a 99.2% service level, thereorder point is about:O 898O 842O 560O 954O 1191

Given data: Average daily demand (d) = 70 unitsThe standard deviation of demand (σ) =4 units…

Answered: For an item with an average daily…

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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If annual sales in are 65,000 units, price per unit is $25, carrying costs are 30%, and fixed costs per order is $100, then EOQ is 1,316.56. True or False?
Ross White’s machine shop uses 2500 brackets during the course of a year, and this usage is relatively constant throughout the year. These brackets are purchased from a supplier 100 miles away for $15 each, and the lead time is 2 days. The holding cost per bracket per year is $1.50 (or 10% of the unit cost) and the ordering cost per order is $18.75. There are 300 working days per year. Develop a total cost model for this system. What is the EOQ for this problem? What is the cycle time? What is the reorder policy? What are the annual holding and ordering costs associated with your recommended EOQ? What is the total annual cost associated with your recommended EOQ?
The EOQ is 75 units. Suppose that the average demand is 18units per week with a standard deviation of 5 units. The lead time is constant at 2 weeks. Determine the safetystock and reorder point if management wants a 90 percent cycle-service level. A museum of natural history opened a gift shop two years ago. Managing inventories has become a problem. Low inventory turnover is squeezing profit margins and causing cash-flow problems. One of the top-selling SKUs in the container group at the museum’s gift shop is a bird feeder. Sales are 18 units per week, and the supplier charges $60 per unit. The cost of placing an order with the supplier is $45. Annual holding cost is 25 percent of a feeder’s value, and the museum operates 52 weeks per year. Management chose a 390-unit lot size so that new orders could be placed less frequently. What is the annual cycle-inventory cost of the current policy of using a 390-unit lot size? Would a lot size of 468 be better?
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?
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 48,000 boxes of chocolate per year costing P12 per box. Inventory carrying cost is equal to 20% of the purchase price. The company uses its inventory at a constant rate. The lead time for placing the order is 3 days, and Bulldogs Co. holds 2,400 boxes of paint as safety stock. If the company orders 2,000 boxes of chocolate per order, what is the cost of carrying inventory? A. P8,160 B. P5,280 C. P5,760 D. P2,400
Yen Inc. uses one raw material type in its manufacturing process. It needs 3,750 kilos of this material each month. It incurs P500 each time when making and receiving orders. Annual carrying cost per unit costs P15 in warehousing and P5 in financing costs. If Zen purchases 1,000 kilograms each time, how much lower would the annual cost be if Zen would now follow the EOQ model?
The economic order quantity of Geo Co. is determined to be 450 units and it sells its only product for P5 each. Every time the company orders, it incurs P50. Holding cost is P10. It takes 3 days to make and receive an order. How much sales should Geo Co. for this economic order quantity to be plausible? (Using 360 day per year)
Ross White’s machine shop uses 2500 brackets during the course of a year, and this usage is relatively constant throughout the year. These brackets are purchased from a supplier 100 miles away for $15 each, and the lead time is 2 days. The holding cost per bracket per year is $1.50 (or 10% of the unit cost) and the ordering cost per order is $18.75. There are 300 working days per year. A. Develop a total cost model for this system. B. What is the EOQ for this problem? C. What is the cycle time?
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?
Suppose Total cost is "A" and EOQ is "B" How much does the total cost increase if the store manager orders twice as many bird feeders as the EOQ? How much the total cost increase if the store manager orders half as many bird feeders as the EOQ? What will be the steps.
Given the following inventory system: average weekly (7 days a week) demand is 1000 units with a standard deviation of 100 units, review period is 28 days (4 weeks), lead time is 14 days (2 weeks) and the target service probability is 90%. Currently, inventory on hand is 500 units. How many units should be ordered? a. 6000 b. 6059 c. 6264 d. 5049 e. 5814

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For an item with an average daily demand of 70 units with a standard deviation of 4 units, an average lead time of 8 days with a standard deviation of 2 days, and a 99.2% service level, the reorder point is about: O 898 O 842 O 560 O 954 O 1191