Business

Operations ManagementQ&A LibraryI 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 corresponding to the reorder policy computed in the previous part (include all formulas)?Question

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 corresponding to the reorder policy computed in the previous part (include all formulas)?

Tagged in

Find answers to questions asked by student like you

Q: When should someone from outside a company be hired to manage the company or one of its business uni...

A: The policy of promotion from within:It is the policy of the firm stating that the promotion opportun...

Q: A vending machine dispenses hot chocolate or coffee. Service time is 30 seconds per cup andis consta...

A: (A) The above problem comes under the simple system queuing model(M/M/1)

Q: Can you help me with figuring out how to do find the correct solution? Other instructions were not a...

A: Step1: Calculating the average total demand of four seasons for last four years. We have,The formula...

Q: How do managers decide when the strategies of position, leverage and opportunity make sense?

A: Strategy:The strategy is a course of action taken by managers to achieve one or more of the goals of...

Q: 1. How would Fixation on Events inherently have tendencies to experience learning disability? Explai...

A: Fixation on events is the one of the most known learning disability.1)Generative learning can't be s...

Q: What is a business reseach methods

A: Business research methods are the techniques used by management to collect, analyse and disseminate ...

Q: The Bargain Hut has 2400 cubic feet of storage space for refrigerators. Large refrigerators come in ...

A: First we develop the model for the problem which is an LP (Linear Programming) problem. Assuming L l...

Q: What industry forces might cause a propitious niche to appear or disappear?

A: 1)Propitious niche of interest will disappear if the external setting and consequently the trade cha...

Q: The Sanders Garden Shop mixes two types of grass seed into a blend. Each type of grass has been rate...

A: Introduction:The given problem is a linear programming Cost Minimization problem. The problem is sol...