Question 7 The information in this paragraph applies to this question and the three questions that follow (so, questions 7-10). Store manager Rosalía has noted that the daily demand for the exclusive Motomami candles produced and sold in her Fire Doll Artisan Chandlery located in downtown Champaign is 40 candles. Fire Doll Artisan Chandlery remains open 365 days a year. The lead time for producing the candles is 9 days. Rosalía uses a continuous review system to manage her inventory relying on economic order quantity (EOQ) to decide how much to make and reorder point (ROP) to decide when to make. Determine the reorder point assuming the daily demand is spread evenly (i.e., no safety stock). Question 8 Rosalía notes that daily demand has a standard deviation of 4 candles. Calculate the safety stock for a 99% service level, the z score for which, using the function =NORM.S.INV(0.99) in Microsoft Excel, is 2.33. Question 9 Rosalía makes the candles in quantities of 560 at a time. How many times does she need to make the candles every year? (Round this to the nearest whole number). Question 10 Based on the batch size of 560 candles, how often (every how many days) does she need to make the candles? (Round this to the nearest whole number).
Question 7
The information in this paragraph applies to this question and the three questions that follow (so, questions 7-10).
Store manager Rosalía has noted that the daily demand for the exclusive Motomami candles produced and sold in her Fire Doll Artisan Chandlery located in downtown Champaign is 40 candles. Fire Doll Artisan Chandlery remains open 365 days a year. The lead time for producing the candles is 9 days. Rosalía uses a continuous review system to manage her inventory relying on economic order quantity (EOQ) to decide how much to make and reorder point (ROP) to decide when to make.
Determine the reorder point assuming the daily demand is spread evenly (i.e., no safety stock).
Question 8
Rosalía notes that daily demand has a standard deviation of 4 candles. Calculate the safety stock for a 99% service level, the z score for which, using the function =NORM.S.INV(0.99) in Microsoft Excel, is 2.33.
Question 9
Rosalía makes the candles in quantities of 560 at a time. How many times does she need to make the candles every year? (Round this to the nearest whole number).
Question 10
Based on the batch size of 560 candles, how often (every how many days) does she need to make the candles? (Round this to the nearest whole number).
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