The annual demand for a product is 15,200 units. The weekly demand is 292 units with a standard deviation of 80 units. The cost to place an order is $33.50, and the time from ordering to receipt is two weeks. The annual inventory carrying cost is $0.10 per unit. a. Find the reorder point necessary to provide a 90 percent service probability. (Use Excel's NORMSINV() function to find the correct critical value for the given α-level. Round "z" value to 2 decimal places.)\ b. Suppose the production manager is asked to reduce the safety stock of this item by 45 percent. If she does so, what will the new service probability be? (Use Excel's NORMSDIST() function to find the correct probability for your computed Z-value. Round "z" value to 2 decimal places and final answer to 1 decimal place.)

The annual demand for a product is 15,200 units. The weekly demand is 292 units with a standard deviation of 80 units. The cost to place an order is $33.50, and the time from ordering to receipt is two weeks. The annual inventory carrying cost is $0.10 per unit. a. Find the reorder point necessary to provide a 90 percent service probability. (Use Excel's NORMSINV() function to find the correct critical value for the given α-level. Round "z" value to 2 decimal places.)\ b. Suppose the production manager is asked to reduce the safety stock of this item by 45 percent. If she does so, what will the new service probability be? (Use Excel's NORMSDIST() function to find the correct probability for your computed Z-value. Round "z" value to 2 decimal places and final answer to 1 decimal place.)

Purchasing and Supply Chain Management

6th Edition

ISBN:9781285869681

Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Chapter16: Lean Supply Chain Management

Section: Chapter Questions

Problem 10DQ: The chapter presented various approaches for the control of inventory investment. Discuss three...

See similar textbooks

Similar questions

The annual demand for a product is 15,600 units. The weekly demand is 300 units with a standard deviation of 90 units. The cost to place an order is $31.20 and the time from ordering to receipt is four weeks. The annual inventory carrying cost is $0.10 per unit. Find the reorder point necessary to provide a 98 percent service probability. Suppose the production manager is asked to reduce the safety stock of this item by 50 percent. If she does so, what will the new service probability be?
The annual demand for a product is 14,500 units. The weekly demand is 279 units with a standard deviation of 85 units. The cost to place an order is $32.00, and the time from ordering to receipt is six weeks. The annual inventory carrying cost is $0.20 per unit. a. Find the reorder point necessary to provide a 95 percent service probability. (Use Excel's NORM.S.INV() function to find the z value. Round z value to 2 decimal places.) b. Suppose the production manager is asked to reduce the safety stock of this item by 55 percent. If she does so, what will the new service probability be? (Use Excel's NORM.S.DIST() function to find the correct probability for your computed z value. Round "z" value to 2 decimal places and final answer to 1 decimal place.)
The annual demand for a product is 15,200 units. The weekly demand is 292 units with a standard deviation of 80 units. The cost to place an order is $33.50, and the time from ordering to receipt is two weeks. The annual inventory carrying cost is $0.10 per unit. a. Find the reorder point necessary to provide a 90 percent service probability. b. Suppose the production manager is asked to reduce the safety stock of this item by 45 percent. If she does so, what will the new service probability be?
Annual demand for a product is 11,960 units; weekly demand is 230 units with a standard deviation of 50 units. The cost of placing an order is $125, and the time from ordering to receipt is four weeks. The annual inventory carrying cost is $0.80 per unit. To provide a 98 percent service probability, what must the reorder point be? Suppose the production manager is told to reduce the safety stock of this item by 125 units. If this is done, what will the new service probability be?
The annual demand for a product is 15,600 units. The weekly demand is 300 units with a standard deviation of 90 units. The cost to place an order is $32.00, and the time from ordering to receipt is four weeks. The annual inventory carrying cost is $0.20 per unit. Find the reorder point necessary to provide a 98 percent service probability then suppose the production manager is asked to reduce the safety stock of this item by 55 percent. If she does so, what will the new service probability be? Use Excel's NORM.S.INV() function to find the z value and probability.
Annual demand for a product is 8,840 units; weekly demand is 170 units with a standard deviation of 65 units. The cost of placing an order is $90, and the time from ordering to receipt is four weeks. The annual inventory carrying cost is $0.90 per unit. a. To provide a 99 percent service probability, what must the reorder point be? b. Suppose the production manager is told to reduce the safety stock of this item by 125 units. If this is done, what will the new service probability be?
Annual demand for a product is 13,000 units; weekly demand is 250 units with a standard deviation of 40 units. The cost of placing an order is $100, and the time from ordering to receipt is four weeks. The annual inventory carrying cost is $0.65 per unit. To provide a 98 percent service probability, what must the reorder point be? Note: Use Excel's NORM.S.INV() function to find the z value. Round z value to 2 decimal places and final answer to the nearest whole number. Suppose the production manager is told to reduce the safety stock of this item by 100 units. If this is done, what will the new service probability be? Note: Use Excel's NORM.S.DIST() function to find the correct probability for your computed z value. Round z value to 2 decimal places and final answer to the nearest whole percent.
The annual demand for a product is 16,800 units. The weekly demand is 323 units, with a standard deviation of 95 units. The cost to place an order is $31.50, and the time from ordering to receipt is two weeks. The annual inventory carrying cost is $0.20 per unit. Find the reorder point necessary to provide a 90% service probability. Suppose the production manager is asked to reduce the safety stock of this item by 40 percent. If she does so, what will the new service probability be? Round to the whole number for the final answer.
The annual demand for a product is 15,200 units. The weekly demand is 292 units with a standard deviation of 80 units. The cost to place an order is $33.50, and the time from ordering to receipt is two weeks. The annual inventory carrying cost is $0.10 per unit. The reorder point is 730. Suppose the production manager is asked to reduce the safety stock of this item by 45 percent. If she does so, what will the new service probability be? (Use Excel's NORMSDIST() function to find the correct probability for your computed Z-value. Round "z" value to 2 decimal places and final answer to 1 decimal place.) *The answer is not 28% or 42% or 58% or 71% or 86.6% or 90%
Do all work in Excel showing formulas An office supply store open 5 days a week must determine the best inventory policy for boxes of copier paper. Weekly demand is nearly constant at 250 boxes and when orders are placed, then entire shipment arrives at once. The cost per box is $22 and the inventory holding cost is 30%. Orders are placed at a cost of $40 each, including preparation time and communication charges, and the lead time is 2 days. a. Find the optimal order quantity. b. What is the reorder point? c. How often should an order be placed? d. What is the cycle time?
Do all work in Excel with Formulas An office supply store open 5 days a week must determine the best inventory policy for boxes of copier paper. Weekly demand is nearly constant at 250 boxes and when orders are placed, then entire shipment arrives at once. The cost per box is $22 and the inventory holding cost is 30%. Orders are placed at a cost of $40 each, including preparation time and communication charges, and the lead time is 2 days. a. Find the optimal order quantity. b. What is the reorder point? c. How often should an order be placed? d. What is the cycle time?
A travel agency has a branch in Tsim Sha Tsui. The number of leaflets distributed to customers at the branch is normally distributed with a mean of 60 copies and a standard deviation of 15 copies each day. The branch operates 300 days per year. The cost of each leaflet is $4 and the carrying cost of each leaflet is 20% per year. The leaflets are supplied by a print shop with a fixed set up cost of $250 per order placement. The delivery leadtime is 6 days. Find the optimal order quantity of leaflet and the minimized total cost of ordering and carrying. Determine the time (in month) between two consecutive orders. Determine the required safety stock and reorder point to achieve a 97% service level. (Round up to the nearest integer where reasonable and appropriate.)