Lumumba Carpet Discount Store sells Super Shag carpet. The average daily customer demand for the carpet stocked by the store is normally distributed, with a mean daily demand of 30 metres and a standard deviation of 5 metres of carpet per day. The lead time for receiving a new order of carpet is 10 days. Advice the the store if they desire a reorder point and safety stock for a service level of 95%, with the probability of a stockout equal to 5%.
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Lumumba Carpet Discount Store sells Super Shag carpet. The average daily customer demand for the carpet stocked by the store is
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- Authentic Thai rattan chairs are delivered to Gary Schwartz's chain of retail stores, called The Kathmandu Shop, once a year. The reorder point, without safety stock, is 200 chairs. Carrying cost is $40 per unit per year, and the cost of a stockout is $70 per chair per year. Given the following demand probabilities during the lead time, how much safety stock should be carried? Demand During Lead Time Probability 0 0.2 100 0.2 200 0.2 300 0.2 400 0.2 The optimal quantity of safety stock which minimizes expected total cost is _ units (enter response as a whole number).The Farmer’s Wife is a country store specializing in knickknacks suitable for a farm-house décor. One item experiencing a considerable buying frenzy is a miniature Holstein cow. Average weekly demand is 30 cows, with a standard deviation of 5 cows. The cost to place a replenishment order is $15 and the holding cost is $0.75/cow/year. The supplier, however, is inChina. The lead time for new orders is 8 weeks, with a standard deviation of 2 weeks. The Farmer’s Wife, which is open only 50 weeks a year, wants to develop a continuous review inventory system for this item with a cycle-service level of 90 percent.a. Specify the continuous review system for the cows. Explain how it would work in practice.b. What is the total annual cost for the system you developed?1. Demand is Normally distributed with a mean of 66 per week and a weekly variance of 3. The ordering cost is $57.5. Lead time is 8 weeks. Shortages cost an estimated $4.14 per unit short to expedite orders to appease customers. The holding cost is $7.06 per week. Estimate the stockout risk if the target service level is 0.22. 2. Demand is Normally distributed with a mean of 43 per week and a weekly variance of 8. The ordering cost is $83.26. Lead time is 4 weeks. Shortages cost an estimated $1.96 per unit short to expedite orders to appease customers. The holding cost is $9.2 per week. Calculate ROP if the target service level is 95%.
- your company is facing the situation in which the demand is stochastic but the lead time is known with certainty. Your company has recently implemented a periodic review policy in which your inventory is reviewed every 30 days. The demand is normally distributed with a mean of 600 items annually. The lead time is 25 days, and the annual standard deviation is 100 units. Inventory shows 20 parts in stock. Your company has a policy of 90% service level type I. Also, ordering cost in $20 and holding cost is also $20 per item per year. a) find the order quantity for the next period b) how would your answer change if service level is defined as the expected number of parts available from stock.Zhou Bicycle Company (ZBC), located in Seattle, is a wholesale distributor of bicycles and bicycle parts. Formed in 1981 by University of Washington Professor Yong-Pin Zhou, the firm’s primary retail outlets are located within a 400-mile radius of the distribution center. These retail outlets receive the order from ZBC within 2 days after notifying the distribution center, provided that the stock is available. However, if an order is not fulfilled by the company, no backorder is placed; the retailers arrange to get their shipment from other distributors, and ZBC loses that amount of business. The company distributes a wide variety of bicycles. The most popular model, and the major source of revenue to the company, is the AirWing. ZBC receives all the models from a single manufacturer in China, and shipment takes as long as 4 weeks from the time an order is placed. With the cost of communication, paperwork, and customs clearance included, ZBC estimates that each time an…Gainesville Cigar stocks Cuban cigars that have variable lead times because of the difficulty in importing the product: Lead time is normally distributed with an average of 8 weeks and a standard deviation of 2 weeks.Demand is also a variable and normally distributed with a mean of 150 cigars per week and a standard deviation of 23 cigars. 90% service level, what is the ROP? The reorder point is _ cigars (round response to the nearest whole number).
- Daily demand for product sample kits is normally distributed with a mean of 35 units and a standard deviation of 4. Supply is virtually certain with a lead time of 9 days. The cost of placing an order is $20, and annual carrying costs for one kit is 25 percent. The price of one kit is $12.50. Assume a year has 365 days.If a 99% service level is desired, what is average inventory on hand? If demand had no variation, what would the reorder point be?Motif is a Turkish electrotechnical company which operates a warehouse in Ankara. The company is currently considering the inventory control of a specialized electronic component in its warehouse. The annual demand for this component is 4000 units. The company applies a holding cost rate of 20% per year and its fixed order costs are 50€ (including transport costs). Over the past years, the company has followed different replenishment order policies. The replenishment order quantities applied so far as well as the associated annual holding costs and annual order costs are shown in the following Table REPLENISHMENT POLICY ORDERS PER YEAR ORDER ORDER QUANTITY ORDER COST (€) HOLDING COST (€) TOTAL COST (€) A 2 2000 100 2500 2600 B 4 1000 200 1250 1450 C 6 667 300 833 1133 Calculate the Economic Order Quantity and evaluate the minimum total yearly costs that the company might achieve and What is the % cost deviation from the…Barbara Flynn is in charge of maintaining hos-pital supplies at General Hospital. During the past year, the mean lead time demand for bandage BX-5 was 60 (and wasnormally distributed). Furthermore, the standard deviation forBX-5 was 7. Ms. Flynn would like to maintain a 90% service level.a) What safety stock level do you recommend for BX-5?b) What is the appropriate reorder point?