Operations Management
17th Edition
ISBN: 9781259142208
Author: CACHON, Gérard, Terwiesch, Christian
Publisher: Mcgraw-hill Education,
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Chapter 10, Problem 1PA
Summary Introduction
To determine: The average daily sales rate.
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Suppose that a local hardware store turns over its inventory of power tools 7.3 times peryear. If the hardware store has an average inventory of 130 power tools, what is its average daily sales rate for power tools? (Assume that there are 365 days per year.)
In a safety stock problem where both demand and lead time are variable, demand averages 150 units per day with a daily standard deviation of 16, and lead time averages 5 days with a standard deviation of 1 day. How much safety stock is required to maintain a 95% customer service level? What is the reorder point? As a part of your answer, include the z-score you used to get this answer.
In a safety stock problem where both demand and lead time are variable, demand averages 150 units per day with a daily standard deviation of 16, and lead time averages 5 days with a standard deviation of 1 day. How much safety stock is required to maintain a 95% customer service level? What is the reorder point? Include the z-score you used to get this answer.
Chapter 10 Solutions
Operations Management
Ch. 10 - It is costly to hold inventory, but inventory can...Ch. 10 - A delivery truck from a food wholesaler has just...Ch. 10 - Prob. 3CQCh. 10 - Prob. 4CQCh. 10 - Prob. 5CQCh. 10 - Prob. 6CQCh. 10 - Prob. 7CQCh. 10 - Prob. 8CQCh. 10 - Prob. 9CQCh. 10 - Prob. 10CQ
Ch. 10 - Prob. 11CQCh. 10 - Prob. 1PACh. 10 - Prob. 2PACh. 10 - Prob. 3PACh. 10 - An electronics manufacturer has 25 days-of-supply...Ch. 10 - Prob. 5PACh. 10 - Prob. 6PACh. 10 - Prob. 7PACh. 10 - Prob. 8PACh. 10 - An online shoe retailers annual cost of holding...Ch. 10 - Prob. 10PACh. 10 - Prob. 11PACh. 10 - Prob. 12PACh. 10 - Prob. 13PACh. 10 - Prob. 14PACh. 10 - Prob. 15PACh. 10 - Prob. 16PACh. 10 - A retailer has annual sales of 500,000 and an...Ch. 10 - Prob. 18PACh. 10 - Prob. 19PACh. 10 - Prob. 1CCh. 10 - Prob. 3CCh. 10 - Prob. 4C
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, operations-management and related others by exploring similar questions and additional content below.Similar questions
- A firm that sells 5,000 blivets per month is trying to determine how many blivets to keep in inventory. The financial manager has determined that it costs $200 to place an order.The cost of holding inventory is 4 cents per month per average blivet in inventory. A five-day lead time is required for delivery of goods ordered. (This lead time is known with certainty.) The operating days per year is 250. What is the economic order quantity? What is the reorder point? At the EOQ level, what is the total carrying cost per month? At the EOQ level, what is the total ordering cost per month?arrow_forwardIt takes approximately 2 weeks (14 days) for an order of steel bolts to arrive once the order has been placed. The demand for bolts is fairly constant; on the average, the manager, Michelle Wu, has observed that the hardware store sells 500 of these bolts each day. Because the demand is fairly constant, Michelle believes that she can avoid stockouts completely if she orders the bolts at the correct time. What is the reorder point? The reorder point is? units (enter your response as a whole number).arrow_forwardAnswer the following true or false.d. ABC analysis ranks items according to the annual value of their demandarrow_forward
- Which of the following is an element of inventory holding costs? All of these are elements of inventory holding costs. investment costs housing costs material handling costs pilferage, scrap, and obsolescencearrow_forwardOperation mangement An online shoe retailer's annual cost of holding inventory is 30 percent. The firm operates with a days-of-supply of 23 days, and assume there are 365 days per year. What is the inventory holding cost (in $s) for a pair of shoes that the firm purchased for $53 ? Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.arrow_forwardhello, can someone help me with this question?: if a company regularly holds 50 units of safety stock of a product and places orders in quantities of 500 units for the same product, what would be the average warehouse inventory for that product?arrow_forward
- In an ABC system based on revenue, C items individually make the lowest annual revenue contribution. TRUE FALSEarrow_forwardA local bookstore turns over its inventory once every three months. The bookstore’sannual cost of holding inventory is 36 percent. What is the inventory holding cost (in $)for a book that the bookstore purchases for $10 and sells for $18?arrow_forwardA firm has P5,000,000 of inventory on average and annual sales of P30,000,000. Assume there are 365 days per year. What is the firm’s inventory conversion period?arrow_forward
- The company uses cooking oil in its business. The usage of cooking oil is normally distributed with an average of 30 gallons per week and a standard deviation of four gallons per week. The manager asked you to help him decide how to reorder cooking oil in order to achieve a service level of 97.5 percent . Lead time is nine days. a) If cooking oil can be ordered as needed, what reorder point should be used? Answer in 2 decimal places.b) If a fixed interval of 20 days is specified, how much safety stock should the company carry. Answer in 2 decimal places.arrow_forwardA natural food store carries a brand of coffee called World’s Greatest Coffee. The following data should be used in your calculations. Demand/Sales = 10 cases of coffee per week (you will need to convert this to an annual amount) Ordering Cost = $12 per order Carrying Charge = 18% per year Unit Cost = $75 per case 1. What is the annual cost or ordering the coffee? What is the annual cost of carrying the coffee? And what is the total cost (ordering and carrying costs added together)?2. Name three reasons or factors that might cause the firm to order a larger or smaller amount than the EOQ.arrow_forwardExplain also Which of the following is most consistent with higher inventory turnover? Lower operating cash flow from accounts payable Lower operating cash flows from daily sales’ outstanding Increased operating cash flow from lower days’ inventory held All the abovearrow_forward
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