Osprey Sports stocks everything that a musky fisherman couldwant in the Great North Woods. A particular musky lure hasbeen very popular with local fishermen as well as those whobuy lures on the Internet from Osprey Sports. The cost to placeorders with the supplier is $30/order; the demand averages4 lures per day, with a standard deviation of 1 lure; and the in-ventory holding cost is $1.00/lure/year. The lead time from thesupplier is 10 days, with a standard deviation of 3 days. It is im-portant to maintain a 97 percent cycle-service level to properlybalance service with inventory holding costs. Osprey Sports isopen 350 days a year to allow the owners the opportunity tofish for muskies during the prime season. The owners want touse a continuous review inventory system for this item.a. What order quantity should be used?b. What reorder point should be used?c. What is the total annual cost for this inventory system?
Critical Path Method
The critical path is the longest succession of tasks that has to be successfully completed to conclude a project entirely. The tasks involved in the sequence are called critical activities, as any task getting delayed will result in the whole project getting delayed. To determine the time duration of a project, the critical path has to be identified. The critical path method or CPM is used by project managers to evaluate the least amount of time required to finish each task with the least amount of delay.
Cost Analysis
The entire idea of cost of production or definition of production cost is applied corresponding or we can say that it is related to investment or money cost. Money cost or investment refers to any money expenditure which the firm or supplier or producer undertakes in purchasing or hiring factor of production or factor services.
Inventory Management
Inventory management is the process or system of handling all the goods that an organization owns. In simpler terms, inventory management deals with how a company orders, stores, and uses its goods.
Project Management
Project Management is all about management and optimum utilization of the resources in the best possible manner to develop the software as per the requirement of the client. Here the Project refers to the development of software to meet the end objective of the client by providing the required product or service within a specified Period of time and ensuring high quality. This can be done by managing all the available resources. In short, it can be defined as an application of knowledge, skills, tools, and techniques to meet the objective of the Project. It is the duty of a Project Manager to achieve the objective of the Project as per the specifications given by the client.
Osprey Sports stocks everything that a musky fisherman could
want in the Great North Woods. A particular musky lure has
been very popular with local fishermen as well as those who
buy lures on the Internet from Osprey Sports. The cost to place
orders with the supplier is $30/order; the demand averages
4 lures per day, with a standard deviation of 1 lure; and the in-
ventory holding cost is $1.00/lure/year. The lead time from the
supplier is 10 days, with a standard deviation of 3 days. It is im-
portant to maintain a 97 percent cycle-service level to properly
balance service with inventory holding costs. Osprey Sports is
open 350 days a year to allow the owners the opportunity to
fish for muskies during the prime season. The owners want to
use a continuous review inventory system for this item.
a. What order quantity should be used?
b. What reorder point should be used?
c. What is the total annual cost for this inventory system?
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