1. HP produces printers for sale in Europe in its Vancouver, Canada factory. Printers sold in different countries differin terms of the power outlet as well as the language manuals. Currently HP assembles and packs printers for sale inindividual countries. The distribution of weekly demand in different countries is normally distributed with mean anstandard deviation as shown in the Table below. Assume demand in different countries to be independent. Giventhat the lead time from the Vancouver factory is six weeks, how much total safety inventory does HP require inEurope if it targets a cycle service level of 95 percent?CountryFrance/BeneluxUK/IrelandGermanyItaly/Spain/PortugalDemandForecast3000400040002500StandardDeviation200022001250800EAMO2ad of el how Autarasesit themsiWhat if HP decides to build a central distribution center (DC) in Europe. It will ship base printers (without powersupply) to the new DC. When an order is received, the DC will assemble power supplies, add manuals, and ship theprinters to the appropriate country. The base printers are still to be manufactured in Canada with a lead time of sixweeks. How much saving of safety inventory can HP expect as a result?

Given: Lead Time = 6 weeksProbability of service level = 95%Then the z value corresponding to 0.95…

Answered: HP produces printers for sale in Europe…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter11: Simulation Models

Section: Chapter Questions

Problem 69P: The Tinkan Company produces one-pound cans for the Canadian salmon industry. Each year the salmon...

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The Tinkan Company produces one-pound cans for the Canadian salmon industry. Each year the salmon spawn during a 24-hour period and must be canned immediately. Tinkan has the following agreement with the salmon industry. The company can deliver as many cans as it chooses. Then the salmon are caught. For each can by which Tinkan falls short of the salmon industrys needs, the company pays the industry a 2 penalty. Cans cost Tinkan 1 to produce and are sold by Tinkan for 2 per can. If any cans are left over, they are returned to Tinkan and the company reimburses the industry 2 for each extra can. These extra cans are put in storage for next year. Each year a can is held in storage, a carrying cost equal to 20% of the cans production cost is incurred. It is well known that the number of salmon harvested during a year is strongly related to the number of salmon harvested the previous year. In fact, using past data, Tinkan estimates that the harvest size in year t, Ht (measured in the number of cans required), is related to the harvest size in the previous year, Ht1, by the equation Ht = Ht1et where et is normally distributed with mean 1.02 and standard deviation 0.10. Tinkan plans to use the following production strategy. For some value of x, it produces enough cans at the beginning of year t to bring its inventory up to x+Ht, where Ht is the predicted harvest size in year t. Then it delivers these cans to the salmon industry. For example, if it uses x = 100,000, the predicted harvest size is 500,000 cans, and 80,000 cans are already in inventory, then Tinkan produces and delivers 520,000 cans. Given that the harvest size for the previous year was 550,000 cans, use simulation to help Tinkan develop a production strategy that maximizes its expected profit over the next 20 years. Assume that the company begins year 1 with an initial inventory of 300,000 cans.
The distribution of daily demand for rental trucks at a vehicle rental company is shown in the following table: Relative Frequency Demand 0.07 0 0.14 1 0.15 2 0.14 3 0.12 4 0.08 5 0.3 6 Trucks are rented by the day only and the company makes $14 per rented truck per day. The rental company keeps four trucks at this location. Assuming that the stocking decision is optimal, what is the implied range of excess cost per truck per day? a. 0 and 186 b. 8.58064 and 14 c. 14 and 24.8889 d. 6 and 8.58064 e. 34.2759 and 79.3333
Happy Henry’s car dealer sells an imported car called the EX123. Once everythree months, a shipment of the cars is made to Happy Henry’s. Emergencyshipments can be made between these three-month intervals to resupply the carswhen inventory falls short of demand. The emergency shipments require twoweeks, and buyers are willing to wait this long for the cars, but will generally goelsewhere before the next three-month shipment is due.From experience, it appears that the demand for the EX123 over a three-monthinterval is normally distributed with a mean of 60 and a variance of 36. The cost ofholding an EX123 for one year is $500. Emergency shipments cost $250 per carover and above normal shipping costs.a. How many cars should Happy Henry’s be purchasing every three months?b. Repeat the calculations, assuming that excess demands are back-ordered fromone three-month period to the next. Assume a loss-of-goodwill cost of $100 forcustomers having to wait until the next three-month period and a…
Harold Grey owns a small farm that grows apricots in the Salinas Valley. The apricotsare dried on the premises and then sold to a number of large supermarket chains. Basedon past experience and committed contracts, he estimates that the sales over the next fiveyears in thousands of packages will be as follows:Year Forecasted Demand(thousands of packages)1 3002 1203 1804 1005 250Grey currently has three workers on the payroll. Assume that each worker stays on thejob for at least one year. He estimates that he will have 10,000 packages on hand at theend of current year. Assume that, on the average, each worker is paid $25,000 per year andis responsible for producing 30,000 packages. Inventory costs have been estimated to be 4cents per package per year, and shortages are not allowed.Based on the effort of interviewing and training new workers, Grey estimates that it costs$500 for each worker hired. Severance pay amounts to $1,000 per worker.(a) Assuming that shortages are not allowed,…
Rex manufacturing purchases a printed circuit board for use in its automatic, computerized, robotbartender. The manufacturing facility has placed the following monthly demands on purchasedgoods inventory during the past year. Month 1 2 3 4 5 6 7 8 9 10 11 12 Demand 205 193 197 220 202 226 179 197 186 202 179 214 This demand schedule can be assumed to be random, to follow a normal distribution, and to berepresentative of what will occur in the future. Rex estimates that a fixed cost of $300 isincurred each time an order is placed for the boards, and that the inventory holding cost is about20% per year of the value of inventory. Each board has an estimated value of $192 at the pointof storage. The lead time on purchase orders is (1/5) month.Part A: What is the EOQ?Part B: What is the safety stock required to assure the management that the chance of a stock outin a cycle is no more than 1%?Part C: What is the reorder level?
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?
The Fast Service Food Mart stocks frozen pizzas in a refrigerated display case. The average daily demand for the pizzas is normally distributed, with a mean of 8 pizzas and a standard deviation of 2.5 pizzas. A vendor for a packaged food distributor checks the market’s inventory of frozen foods every 10 days, and during a particular visit, there were no pizzas in stock. The lead time to receive an order is 3 days. Determine the order size for this order period that will result in a 99% service level. During the vendor’s following visit, there were 5 frozen pizzas in stock. What is the order size for the next order period?
3. Cynthia Knott’s oyster bar buys fresh Louisiana oysters for $5 per pound and sells them for $12 per pound. Any oysters not sold that day are sold to her cousin, who has a nearby grocery store, for $1 per pound. Cynthia believes that demand follows the normal distribution, with a mean of 100 pounds and a standard deviation of 15 pounds. a) What is the cost of underestimating demand for each pound? b) What is the overage cost per pound? c) How many pounds of oyster should she order each day? d) What is the stockout risk for this order size?
A retailer has 7 stores in different cities in northern Ontario. The weekly demand for each store follows the normal distribution with a mean value of 60 and a standard deviation of 10. The retailer is planning to use a single centralized store in northern Ontario and they think the demand in the single store will be equal to the sum of the demand in all 7 cities. It takes 3 weeks for the supplier to send the products to the retailer. Calculate the safety stock for the centralized and decentralized cases if the correlation of demands between different cities is 0.3. Assume the planned customer service level is 98%. Please post answer in excel showing formula and answer
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.
North Dakota Electric Company estimates its demand trend line (in millions of kilowatt hours) to be: D = 80.0 + 0.43Q, where Q refers to the sequential quarter number and Q = 1 for winter of Year 1. In addition, the multiplicative seasonal factors are as follows: Quarter Factor (Index) Winter 0.80 Spring 1.25 Summer 1.45 Fall 0.50 In year 26 (quarters 101-104), the energy use for each of the quarters beginning with winter is (round your response to one decimal place): Quarter Energy Use Winter 98.798.7 Spring nothing
The distribution of daily demand for party cakes at a bakery is shown in the following table: Relative Frequency Demand 0.08 18 0.02 21 0.02 34 0.04 43 0.07 56 0.38 67 0.12 87 0.27 114 Determine the optimal number of cakes to make each day if labour and material are estimated to cost $35.455 per unit. Cakes are sold for $50.65 per unit, and leftover cakes at the end of the day are sold next day at half price. a. 114 b. 67 c. 87 d. 43 e. 56

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