XYZ Print Inc. uses plain paper for copying needs. Weekly demand for that paper follows a normal distribution with mean 100 and standard deviation of 50 (measured in reams). Each week, a replenishment order is placed with its supplier and the order arrives one week later. All copying orders that cannot be satisfied immediately due to the lack of paper are backordered. a. Suppose that XYZ Print Inc. decides to establish an order-up-to level of 300 for plain paper. At the start of this week, there are 200 boxes in inventory and 60 boxes on order. How much will XYZ Print order this week?

XYZ Print Inc. uses plain paper for copying needs. Weekly demand for that paper follows a normal distribution with mean 100 and standard deviation of 50 (measured in reams). Each week, a replenishment order is placed with its supplier and the order arrives one week later. All copying orders that cannot be satisfied immediately due to the lack of paper are backordered. a. Suppose that XYZ Print Inc. decides to establish an order-up-to level of 300 for plain paper. At the start of this week, there are 200 boxes in inventory and 60 boxes on order. How much will XYZ Print order this week?

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...

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Rick Jerz is attempting to perform an inventory analysison one of his most popular products. Annual demand for thisproduct is 5,000 units; ca rrying cost is $50 per unit per year; ordercosts for his company typically run nearly $30 per order; and leadtime averages I 0 days. (Assume 250 working days per year.)a) What is the economic order quantity?b) What is the average inventory?c) What is the optimal number of orders per year?d) What is the optimal number of working days between orders?e) What is the total annual inventory cost (carrying cost+ ordering cost)?t) What is the reorder poi nt?
Peet's Coffees in Menlo Park, California, sells Melitta Number 101 coffee filters at a fairly steady rate of about 60 boxes of filters monthly. The filters are ordered from a supplier in Trenton, New Jersey. Peet's manager is interested in applying some inventory theory to determine the best replenishment strategy for the filters. Peet's pays $2.80 per box of filters and estimates that fixed costs of employee time for placing and receiving orders amount to about $20. Peet's uses a 22 percent annual interest rate to compute holding costs. b. Suppose that it takes three weeks to receive a shipment. What inventory of filters should be on hand when an order is placed?
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A local artisan uses supplies purchased from an overseas supplier. The ownerbelieves the assumptions of the EOQ model are met reasonably well. Minimization ofinventory cost is her objective. Relevant data, from the files of the credit firm, are annualdemand (C) = 240 units, ordering cost (B) = 42 MU/order, and holding cost = 4MU/unit/year.a) How many should she order at one time?b) How many times per year will she replenish its inventory of this material?c) What will be the total inventory costs associated with this material? Please mention formulas and do it in detail so I can understand.
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