The home appliance department of a large department store is using a lot size-reorder point system to control the replenishment of a particular model of coffe machin store sells an average of 12 machines each week. Weekly demand follows a normal distribution with variance 9. The store pays $20 for each coffe machine, which it S 575. Fixed costs of replenishment amount to $28 The accounting department recommends a 20 percent interest rate for the cost of capital including storage and break each item If a customer demands the coffe machine when it is out of stock, the customer will generally go elsewhere. Loss-of-goodwill costs are estimated to be about $25 per cO machine Replenishment lead time is three months Assume 1year=48 weeks If lot sizes are based on the EOQ formula, what lot size and reorder level should be used for the coffe machine? Q=90 R= 182

The home appliance department of a large department store is using a lot size-reorder point system to control the replenishment of a particular model of coffe machin store sells an average of 12 machines each week. Weekly demand follows a normal distribution with variance 9. The store pays $20 for each coffe machine, which it S 575. Fixed costs of replenishment amount to $28 The accounting department recommends a 20 percent interest rate for the cost of capital including storage and break each item If a customer demands the coffe machine when it is out of stock, the customer will generally go elsewhere. Loss-of-goodwill costs are estimated to be about $25 per cO machine Replenishment lead time is three months Assume 1year=48 weeks If lot sizes are based on the EOQ formula, what lot size and reorder level should be used for the coffe machine? Q=90 R= 182

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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