Susan manages the packaging supplies for the New Zealand distributorship of AllBirds product lines. It;s her job to order all the shoe boxes that house each pair of shoes (whether going to retail stores, or shipping directly to consumers via the online store). She purchases shoe boxes from a local printing supplier. The NZ distributor ships on average 325 boxes of shoes each month. Boxes cost $2.25 each, and each order costs $18 to process. Because of limited storage space, Susan's manager wants to charge inventory holding at 25% of the unit cost. The lead time is 7 days. Assume 360 working days per year. Calculate the following: a. Economic order Wuantity b. Reorder Point (assuming no safety stocks) c.Number of orders-per-Year d.Total annual cost e.If storage space was so limited, Susan estimates that inventory holding cots would only be 15% of unit cost. How would that change total annual costs?

Susan manages the packaging supplies for the New Zealand distributorship of AllBirds product lines. It;s her job to order all the shoe boxes that house each pair of shoes (whether going to retail stores, or shipping directly to consumers via the online store). She purchases shoe boxes from a local printing supplier. The NZ distributor ships on average 325 boxes of shoes each month. Boxes cost $2.25 each, and each order costs $18 to process. Because of limited storage space, Susan's manager wants to charge inventory holding at 25% of the unit cost. The lead time is 7 days. Assume 360 working days per year. Calculate the following: a. Economic order Wuantity b. Reorder Point (assuming no safety stocks) c.Number of orders-per-Year d.Total annual cost e.If storage space was so limited, Susan estimates that inventory holding cots would only be 15% of unit cost. How would that change total annual costs?

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 33P: Assume the demand for a companys drug Wozac during the current year is 50,000, and assume demand...

See similar textbooks

Similar questions

Located in the picturesque Berkshire Mountains of Western Massachusetts, Ski Butternut has been a family-owned, family-oriented ski destination for more than 50 years. The resort includes 22 trails for downhill skiing and snowboarding, two terrain parks for riding, and a dedicated area for snow tubing. Although Ski Butternut hosts some non-ski events during summer and fall, its business goes into high gear when snowy weather arrives, bringing skiers and riders from across Massachusetts, Connecticut, New York, and New Jersey. Matt Sawyer, Ski Butternuts director of marketing, says the primary target market has always been families with young children who are seeking affordable skiing. Everything from the snack-bar menus to the ski-shop merchandise is presented with families in mind. So that parents can have fun in the snow without worry, the resort has a Childrens Center for children who are too young to ski or have no interest. Fifth-graders are invited to ski for free when accompanied by an adult who buys an adult lift ticket. The resort also created two terrain parks for young snowboarders who were clamoring for a more exciting riding experience. Without the terrain parks, Sawyer says, these boarders would have asked their parents to take them to competing mountains in Vermont. Ski Butternuts research shows that first-timers are a particularly important segment, because they tend to have a strong allegiance to the resort where they learn to ski. First-timers typically visit the resort seven times before seeking out more challenging mountains. As a result, Ski Butternut has made teaching first-timers to ski or snowboard one of its specialties. For this market, the resort bundles ski or board rentals, lift tickets, and also offers a wide range of individual and group lessons for all ages and abilities at a value price. Because Ski Butternut has trails for different skill levels, beginners can challenge themselves by changing trails within the resort once they feel confident. Ski Butternut also targets seniors and college students. Knowing that weekends are the busiest period, the resort offers special midweek prices to attract seniors who have free time to ski on weekdays. College students are particularly value-conscious, and they often travel to ski resorts as a group. As a result, Ski Butternut offers weekend and holiday discounts to bring in large numbers of students who would otherwise ski elsewhere. Thanks to Facebook, Twitter, and other social media, students quickly spread the word about special pricing, which enhances Ski Butternuts ability to reach this key segment. In addition, the resort highlights discount pricing for families when targeting specific segments, such as scout troops, military personnel, emergency services personnel, and members of local ski clubs. Another segment Ski Butternut has selected for marketing attention is ski racers. The resort features professional coaching, lessons, and programs for ski racers in the age group of 8 to 20. Sawyer notes that these ski racers are extremely dedicated to training, which means theyre on the slopes as often as possible, a positive for the resorts attendance and revenue. To stay in touch with racers, Ski Butternut has a special website and a dedicated Facebook page. Sawyer conducts up to 1,200 customer surveys every year to better understand who his customers are and what they need. He also compares the results with skiers who visit mountains of a similar size in other areas. Digging deeper, he analyzes data drawn from the ski shops rental business to build a detailed picture of customers demographics, abilities, and preferences. Based on this research, he knows that the typical family at Ski Butternut consists of two children under age 18 who ski or ride, and at least one parent who skis. Because they can obtain so much information from and about their customers, Sawyer and his team are able to make better decisions about the marketing mix for each segment. By better matching the media with the audience, they get a better response from advertising, e-mail messages, and other marketing communications. As one example, they found that 15 percent of the visitors to Ski Butternuts website were using a smartphone to access the site. Sawyer has now created a special version of the site specifically for mobile use and created a text-message contest to engage skiers who have smartphones.16 Of the four categories of variables, which one seems to be the most central to Ski Butternuts segmentation strategy, and why?
Located in the picturesque Berkshire Mountains of Western Massachusetts, Ski Butternut has been a family-owned, family-oriented ski destination for more than 50 years. The resort includes 22 trails for downhill skiing and snowboarding, two terrain parks for riding, and a dedicated area for snow tubing. Although Ski Butternut hosts some non-ski events during summer and fall, its business goes into high gear when snowy weather arrives, bringing skiers and riders from across Massachusetts, Connecticut, New York, and New Jersey. Matt Sawyer, Ski Butternuts director of marketing, says the primary target market has always been families with young children who are seeking affordable skiing. Everything from the snack-bar menus to the ski-shop merchandise is presented with families in mind. So that parents can have fun in the snow without worry, the resort has a Childrens Center for children who are too young to ski or have no interest. Fifth-graders are invited to ski for free when accompanied by an adult who buys an adult lift ticket. The resort also created two terrain parks for young snowboarders who were clamoring for a more exciting riding experience. Without the terrain parks, Sawyer says, these boarders would have asked their parents to take them to competing mountains in Vermont. Ski Butternuts research shows that first-timers are a particularly important segment, because they tend to have a strong allegiance to the resort where they learn to ski. First-timers typically visit the resort seven times before seeking out more challenging mountains. As a result, Ski Butternut has made teaching first-timers to ski or snowboard one of its specialties. For this market, the resort bundles ski or board rentals, lift tickets, and also offers a wide range of individual and group lessons for all ages and abilities at a value price. Because Ski Butternut has trails for different skill levels, beginners can challenge themselves by changing trails within the resort once they feel confident. Ski Butternut also targets seniors and college students. Knowing that weekends are the busiest period, the resort offers special midweek prices to attract seniors who have free time to ski on weekdays. College students are particularly value-conscious, and they often travel to ski resorts as a group. As a result, Ski Butternut offers weekend and holiday discounts to bring in large numbers of students who would otherwise ski elsewhere. Thanks to Facebook, Twitter, and other social media, students quickly spread the word about special pricing, which enhances Ski Butternuts ability to reach this key segment. In addition, the resort highlights discount pricing for families when targeting specific segments, such as scout troops, military personnel, emergency services personnel, and members of local ski clubs. Another segment Ski Butternut has selected for marketing attention is ski racers. The resort features professional coaching, lessons, and programs for ski racers in the age group of 8 to 20. Sawyer notes that these ski racers are extremely dedicated to training, which means theyre on the slopes as often as possible, a positive for the resorts attendance and revenue. To stay in touch with racers, Ski Butternut has a special website and a dedicated Facebook page. Sawyer conducts up to 1,200 customer surveys every year to better understand who his customers are and what they need. He also compares the results with skiers who visit mountains of a similar size in other areas. Digging deeper, he analyzes data drawn from the ski shops rental business to build a detailed picture of customers demographics, abilities, and preferences. Based on this research, he knows that the typical family at Ski Butternut consists of two children under age 18 who ski or ride, and at least one parent who skis. Because they can obtain so much information from and about their customers, Sawyer and his team are able to make better decisions about the marketing mix for each segment. By better matching the media with the audience, they get a better response from advertising, e-mail messages, and other marketing communications. As one example, they found that 15 percent of the visitors to Ski Butternuts website were using a smartphone to access the site. Sawyer has now created a special version of the site specifically for mobile use and created a text-message contest to engage skiers who have smartphones.16 What role do geographic variables play in Ski Butternuts segmentation and targeting?
Located in the picturesque Berkshire Mountains of Western Massachusetts, Ski Butternut has been a family-owned, family-oriented ski destination for more than 50 years. The resort includes 22 trails for downhill skiing and snowboarding, two terrain parks for riding, and a dedicated area for snow tubing. Although Ski Butternut hosts some non-ski events during summer and fall, its business goes into high gear when snowy weather arrives, bringing skiers and riders from across Massachusetts, Connecticut, New York, and New Jersey. Matt Sawyer, Ski Butternuts director of marketing, says the primary target market has always been families with young children who are seeking affordable skiing. Everything from the snack-bar menus to the ski-shop merchandise is presented with families in mind. So that parents can have fun in the snow without worry, the resort has a Childrens Center for children who are too young to ski or have no interest. Fifth-graders are invited to ski for free when accompanied by an adult who buys an adult lift ticket. The resort also created two terrain parks for young snowboarders who were clamoring for a more exciting riding experience. Without the terrain parks, Sawyer says, these boarders would have asked their parents to take them to competing mountains in Vermont. Ski Butternuts research shows that first-timers are a particularly important segment, because they tend to have a strong allegiance to the resort where they learn to ski. First-timers typically visit the resort seven times before seeking out more challenging mountains. As a result, Ski Butternut has made teaching first-timers to ski or snowboard one of its specialties. For this market, the resort bundles ski or board rentals, lift tickets, and also offers a wide range of individual and group lessons for all ages and abilities at a value price. Because Ski Butternut has trails for different skill levels, beginners can challenge themselves by changing trails within the resort once they feel confident. Ski Butternut also targets seniors and college students. Knowing that weekends are the busiest period, the resort offers special midweek prices to attract seniors who have free time to ski on weekdays. College students are particularly value-conscious, and they often travel to ski resorts as a group. As a result, Ski Butternut offers weekend and holiday discounts to bring in large numbers of students who would otherwise ski elsewhere. Thanks to Facebook, Twitter, and other social media, students quickly spread the word about special pricing, which enhances Ski Butternuts ability to reach this key segment. In addition, the resort highlights discount pricing for families when targeting specific segments, such as scout troops, military personnel, emergency services personnel, and members of local ski clubs. Another segment Ski Butternut has selected for marketing attention is ski racers. The resort features professional coaching, lessons, and programs for ski racers in the age group of 8 to 20. Sawyer notes that these ski racers are extremely dedicated to training, which means theyre on the slopes as often as possible, a positive for the resorts attendance and revenue. To stay in touch with racers, Ski Butternut has a special website and a dedicated Facebook page. Sawyer conducts up to 1,200 customer surveys every year to better understand who his customers are and what they need. He also compares the results with skiers who visit mountains of a similar size in other areas. Digging deeper, he analyzes data drawn from the ski shops rental business to build a detailed picture of customers demographics, abilities, and preferences. Based on this research, he knows that the typical family at Ski Butternut consists of two children under age 18 who ski or ride, and at least one parent who skis. Because they can obtain so much information from and about their customers, Sawyer and his team are able to make better decisions about the marketing mix for each segment. By better matching the media with the audience, they get a better response from advertising, e-mail messages, and other marketing communications. As one example, they found that 15 percent of the visitors to Ski Butternuts website were using a smartphone to access the site. Sawyer has now created a special version of the site specifically for mobile use and created a text-message contest to engage skiers who have smartphones.16 How is Ski Butternut applying behavioristic variables in its segmentation strategy? Explain your answer.
Assume the demand for a companys drug Wozac during the current year is 50,000, and assume demand will grow at 5% a year. If the company builds a plant that can produce x units of Wozac per year, it will cost 16x. Each unit of Wozac is sold for 3. Each unit of Wozac produced incurs a variable production cost of 0.20. It costs 0.40 per year to operate a unit of capacity. Determine how large a Wozac plant the company should build to maximize its expected profit over the next 10 years.
I need a detailed explanation and assistance to solve this problem: Wineco produces wine cooler as a blend of wine, grape juice and apple juice ingredients, which it sells for $4 per gallon. The costs of ingredients are given in the following table: Cooler Ingredient Price per Gallon ($) wines 1.20 grape juice 1.40 Apple juice 0.60 Wineco owns a blending plant with a production capacity of 200 gallons per day. Because the plant is fully automated, all other production costs are negligible by comparison to the cost of ingredients, and can be ignored. Government regulations mandate that wine cooler products must satisfy the following guidelines: At least 10% of the blend produced must be grape juice. The ratio of apple juice to grape juice in the blend produced must be 2.5:1 The blend produced must contain between 20% and 25% wine. Wineco wishes to use LP in order to determine the quantities of ingredients to buy for a day’s production of wine cooler, so…
ProHaul specializes in trans-American shipments for businesses through the delivery of containers. For every container the company loads on its trucks, ProHaul estimates the haul costs $1,000. In addition, containers are weighed and for each pound, there are hauling fees of $0.15. ProHaul plans to charge $0.49 per pound to his customers.a. How many pounds would a container have to hold in order for the company to Break Even?b. What would the total revenue be for this?c. The company finds out that to maintain the integrity of its containers, each container could only hold an average of 8,000 pounds. What would the company have to charge customers to make $5,000 in profit on each container?
My School Notebook Company produces custom 3-ring binders with school logos for high schools in the Midwest. They mold binders in four standard colors and then imprint the school’s logo on a to-order basis. The average daily demand for the base color notebooks is as follows: Green: 470 notebooks/day Blue: 200 notebooks/day Red: 280 notebooks/day Black: 330notebooks/day MySchool can produce 1,760 notebooks per 24-hour day. It takes 8 hours to setup production for another color. Calculate the minimum production cycle time in days.
Francesca’s Boutique has a merchandise budget that includes $53,420 in planned sales for Dresses, $5342 in planned reductions, and $63,762 in planned purchases. The assortment includes 4 sub classifications (Casual (30%), dressy (20%), day-to-night (35%), date night (15%)) with 5styles, 4 colors, 4 sizes (for each sub class). The average first price on the dress is $45. Francesca’s expects to devote about 50 square feet to displaying the dresses in each store (10 stores), and the shirts to generate approx. $107 per square foot during the fall selling period. Markdowns are expected to be 10% of sales. Average Markup is 63%. Based on the information provided: What is the planned volume of the assortment? (Note: Use Planned Merchandise to Receive figures) How many SKUs are in this assortment? What is the model stock for the entire dress assortment?
Because Home-Style does not use preservatives in their cookies, shelf life is an issue. Therefore, Home-Style runs small batches of cookies in order to meet demand but not have excess inventory. The production team schedules batches of chocolate chip cookies every three days. They adjust the number of cookies per production run in order to meet projected demand. For a standard run of 2,000 chocolate chip cookies, they use: 19 cups all-purpose flour 7 teaspoons salt 7 teaspoons baking powder 7 teaspoons baking soda 17 sticks unsalted butter, softened 12 cups packed dark brown sugar 1 3/4 cup granulated sugar 14 large eggs 14 teaspoons vanilla extract 14 cups semisweet chocolate chips Which ingredients are the most perishable and would need to be ordered more frequently? What could the operations manager do to minimize the reorder lead time for these in-demand perishable ingredients? What could Home-Style do to ensure all cookies are sold before their 3-day shelf life expires? What could…
Auria will produce 3 vehicle components and knows that each start generates a cost of 5,000 pesos. The cost of the units is $ 200, $ 100 and $ 70 respectively. Annual demand is 100,000 units for Product A, 150,000 units for Product B, and 200,000 units for Product C. The inventory rate is 15% per month. Product A and B are basic and substitutable products, so there must be a minimum average inventory of 8,000 units of both. The company seeks a maximum of $ 100,000 invested money in inventory. The available warehouse space is 400m3 and product A occupies 0.5m3, product B 0.7m3 and C 1m3. Consider that product A and C allow shortages and the goodwill loss cost is $ 3 for each unit of those items. a) Formulate the problem as a mathematical programming model (objective function and constraints) that minimizes the total annual cost
Single-period. This type of problem can be recognized when a probability distribution or empirical Problem 8distribution for demand for a “perishable” item is given along with unit shortage and excess costs, orinformation that can be used to calculate them. Use these steps to solve the problem:1. Compute the optimal service level using Formula 13–17.2. If the given distribution is uniform or normal, use that to obtain the exact stocking level.3. If the distribution is Poisson or empirical, SL will fall between two cumulative frequencies.Round up to the higher frequency to find the optimal stocking level. Note: If the distribution isempirical, first obtain the cumulative frequencies or probabilities.A firm that installs cable TV systems uses a certain piece of equipment for which it carries two spareparts as optimal. The parts cost $500 each and have no salvage value or useful life after one period.Part failures can be modeled by a Poisson distribution with a mean of two failures during…
The three blood banks in Franklin County are coor-dinated through a central office that facilitates blood delivery to four hospitals in the region. The cost toship a standard container of blood from each bankto each hospital is shown in the table on this page.Also given are the biweekly number of containers of blood available at each bank and the biweekly num-ber of containers needed at each hospital. How many shipments should be made biweekly from eachblood bank to each hospital so that total shipmentcosts are minimized? From\To Hospital 1 Hospital 2 Hospital 3 Hospital 4 Supply Bank 1 $8 $9 $11 $16 50 Bank 2 12 7 5 8 80 Bank 3 14 10 6 7 120 Demand 90 70 40 50