Mancuso's Music Store is a small business that sells instruments, books, stands, and other music-related products. The owner always likes to have extra musicstands in storage in case a large order arrives suddenly - typically 2 weeks' worth of sales. When an order is placed, the delivery takes 5 business days to arrive.The owner has studied working capital management and estimates that the economic order quantity for music stands is 1500 for each time an order is placed. Thefixed cost of an order is $210 and the carrying cost per stand per year is $1.70. How many music stands will the store have in stock immediately after a shipmentarrives? Assume the store is closed on Sundays (a 6-day business week), holidays, and a few vacation days, so that the store has 300 business days per year. Giveyour answer rounded to the nearest whole number of music stands. Do not include comma separators in your answer.

As per the given question, the lead time is 5 business days, Economic Order Quantity is 1500 units.…

Answered: Mancuso's Music Store is a small…

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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Henrique Correa’s bakery prepares all its cakesbetween 4 a.m. and 6 a.m. so they will be fresh when customers arrive. Day-old cakes are virtually always sold, but at a 50% dis-count off the regular $10 price. The cost of baking a cake is $6, and demand is estimated to be normally distributed, with a mean of 25and a standard deviation of 4. What is the optimal stocking level?

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