RoyalTech's South Jersey warehouse faces a daily demand that is normally distributed, with mean 1,000 and standard deviation 100 pallets.RoyalTech's supplier has a lead-time that is normally distributed, with mean 5 days and standard deviation 1 day.RoyalTech reviews its inventory periodically, that is, every 7 days. (Hint: think about the inventory model appropriate here)RoyalTech's warehouse runs 365 days a year, and the cost of carrying inventory is 18.25% per year.The supplier charges RoyalTech $2,000 per pallet, and $5,000 per delivery.RoyalTech plans to maintain 98% SL.NORMSINV(0.98) = 2.054. L(2.054) = 0.0073.Answer the following questions.1. How much safety stock should Royal Tech carry? [Select]v pallets.2. What is RoyalTech's average inventory? [ Select ]pallets.3. What is the total relevant cost incurred by RoyalTech per day? $ [ Select]4. What is the Fill Rate that RoyalTech is able to achieve for this service level? [ Select ]

Given data: Demand = 1000 units per day Standard deviation = 100 per day Lead time = 5 days…

Answered: RoyalTech's South Jersey warehouse…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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An electronics retailer wants to develop an inventory policy to achieve 99% chance of not getting stockouts for a chip. The daily demand for the chip is estimated to be Normal with mean 200 and standard deviation of 20. They count the chip inventory every 2 weeks to place an order, and it takes 11 days for the ordered chips to be delivered. The retailer operates 7 days a week, 365 days a year. They are going to implement an order-up-to model. A) What base stock level should they choose? B) What is the number of chips they would have on order (on average)? C) When they checked their inventory of chips to place a new order, they found that they ran out of stock completely. In addition, they have 10 chips on way to be delivered, while there are five customers who paid for 20 chips in total and are waiting to receive their chips. How many chips should the retailer order?
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A small coffee shop consumes on average 5000 bags of their most popular coffee beans each month. Demand is normally distributed with standard deviation of the monthly demand being 200 bags. The shop pays $12 for each bag to the supplier. The cost of ordering and receiving shipments is $12 per order. Accounting estimates annual inventory carrying cost is 30% of its value. The supplier lead time is a constant of 2 operating days. The shop operates 240 days per year, i.e., the shop operates 20 days each month. Each order is received from the supplier in a single delivery. The coffee shop uses continuous review (i.e., fixed-order quantity) inventory system and pays the supplier when the order is delivered (i.e., cash on delivery). There are no quantity discounts. Please keep two decimal places in all your calculations. How many times per year will the shop order on average?
A small coffee shop consumes on average 5000 bags of their most popular coffee beans each month. Demand is normally distributed with standard deviation of the monthly demand being 200 bags. The shop pays $12 for each bag to the supplier. The cost of ordering and receiving shipments is $12 per order. Accounting estimates annual inventory carrying cost is 30% of its value. The supplier lead time is a constant of 2 operating days. The shop operates 240 days per year, i.e., the shop operates 20 days each month. Each order is received from the supplier in a single delivery. The coffee shop uses continuous review (i.e., fixed-order quantity) inventory system and pays the supplier when the order is delivered (i.e., cash on delivery). There are no quantity discounts. Please keep two decimal places in all your calculations. What is the store’s minimum total annual cost of placing orders & carrying inventory (cycle stock)?
A small coffee shop consumes on average 5000 bags of their most popular coffee beans each month. Demand is normally distributed with standard deviation of the monthly demand being 200 bags. The shop pays $12 for each bag to the supplier. The cost of ordering and receiving shipments is $12 per order. Accounting estimates annual inventory carrying cost is 30% of its value. The supplier lead time is a constant of 2 operating days. The shop operates 240 days per year, i.e., the shop operates 20 days each month. Each order is received from the supplier in a single delivery. The coffee shop uses continuous review (i.e., fixed-order quantity) inventory system and pays the supplier when the order is delivered (i.e., cash on delivery). There are no quantity discounts. Please keep two decimal places in all your calculations. What quantity should the shop order with each order? How many times per year will the shop order on average? How many operating days will elapse on average between two…
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That One Book sells its books through The Witch and the Wardrobe bookstores. It costs That One Book $0.80 to print each book; it sells the book to The Witch and the Wardrobe for $2.50. The Witch and the Wardrobe then sells the books at retail for $6.00. Whatever doesn’t sell gets thrown away. Demand for the book each issue is normal with a mean of 5219 and a standard deviation of 1610. To give The Witch and the Wardrobe incentive to order more books, it proposes a revenue-sharing contract. Instead of selling the book to The Witch and the Wardrobe for $2.50, That One Book will sell its books to The Witch and the Wardrobe for only $1.00. However, for each book that The Witch and the Wardrobe sells at retail, The Witch and the Wardrobe must give $2.00 back to That One Book. With this revenue sharing agreement in place, what is the optimal order amount that will maximize The Witch and the Wardrobe expected profit? Please do fast ASAP
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