Practical Operations Management
2nd Edition
ISBN: 9781939297136
Author: Simpson
Publisher: HERCHER PUBLISHING,INCORPORATED
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Question
Chapter 10, Problem 2P
Summary Introduction
Interpretation: Impact on safety stock when a reorder point is increased is to be ascertained.
Concept Introduction:
Reorder point is the minimum level of inventory or stock which indicates a firm to restock its inventory. It is an indicator for a firm to restore its stock.
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Chapter 10 Solutions
Practical Operations Management
Ch. 10 - Prob. 1DQCh. 10 - Prob. 2DQCh. 10 - Prob. 3DQCh. 10 - Prob. 4DQCh. 10 - Prob. 5DQCh. 10 - Prob. 6DQCh. 10 - Prob. 1PCh. 10 - Prob. 2PCh. 10 - Prob. 3PCh. 10 - Prob. 4P
Ch. 10 - Prob. 5PCh. 10 - Prob. 6PCh. 10 - Prob. 7PCh. 10 - Prob. 8PCh. 10 - Prob. 9PCh. 10 - Prob. 10PCh. 10 - Prob. 11PCh. 10 - Prob. 12PCh. 10 - Prob. 13PCh. 10 - Prob. 14PCh. 10 - Prob. 15PCh. 10 - Prob. 16PCh. 10 - Prob. 17PCh. 10 - Prob. 18PCh. 10 - Prob. 19PCh. 10 - Prob. 20PCh. 10 - Prob. 21PCh. 10 - Prob. 22PCh. 10 - Prob. 23PCh. 10 - Prob. 24PCh. 10 - Prob. 25PCh. 10 - Prob. 26PCh. 10 - Prob. 27PCh. 10 - Prob. 28PCh. 10 - Prob. 29PCh. 10 - Prob. 30PCh. 10 - Prob. 31PCh. 10 - Prob. 2.1QCh. 10 - Prob. 2.2QCh. 10 - Prob. 2.3QCh. 10 - Prob. 2.4QCh. 10 - Prob. 3.1QCh. 10 - Prob. 3.2QCh. 10 - Prob. 3.3QCh. 10 - Prob. 3.4Q
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- When cycle counting inventory, why do experts recommend a lower acceptable error tolerance for A items than B or C items?arrow_forwardPart Number Part Unit Value in $ Quantity currently in inventory Average annual usage 1234 2.5 3000 1235 0.2 900 1236 15 1000 1237 0.75 7900 1238 7.6 2800 1239 4.4 5000 1240 1.8 1800 1241 0.05 1200 1242 17.2 2000 1243 2500 1244 7000 300 550 400 50 180 20 200 10 950 160 430 9 3.2 given following table, perform ABC classificationarrow_forwardXemex has collected the following inventory data for the six items that it stocks: ITEM CODE UNIT COST ($) ANNUAL DEMAND (UNITS) ORDERING COST ($) CARRYING COST AS A PERCENTAGE OF UNIT COST 1 10.60 600 40 20 2 11.00 450 30 25 3 2.25 500 50 15 4 150.00 560 40 15 5 4.00 540 35 16 6 4.10 490 40 17 Lynn Robinson, Xemex’s inventory manager, does not feel that all of the items can be controlled. What ordered quantities do you recommend for which inventory product(s)?arrow_forward
- Walrus Company has the following information available concerning one of its inventory items: Cost of placing an order $30.00 Unit carrying cost per year $3.00 Annual unit demand 6,625 Safety stock 125 Average daily demand 25 Normal lead time in days 10 If there is a delay in shipping the item, approximately how many days can be covered by the safety stock? a.5 days b.110 days c.26 days d.31 daysarrow_forwardInventory order is placed when 1)Only when projected or actual on hand stocks value is 2)positive Only when projected or actual on hand stocks are higher than the safety stock 3)Only when projected or actual stocks on hand is below zero. 4)None of thesearrow_forwardWhat is the cause of inventory issues and what fundamental principles does it reveal?arrow_forward
- The Big Buy Supermarket stocks Munchies Cereal. Demand for Munchies is 4,000 boxes peryear (365 days). It costs the store $60 per order of Munchies, and it costs $0.80 per box per yearto keep the cereal in stock. Once an order for Munchies is placed, it takes 4 days to receive theorder from a food distributor. Determine The reorder pointarrow_forwardThe electrolyte drink for our beloved NMSU soccer team average normally distributed demand of 5 units and a standard deviation of 1 unit. Lead time for replenishment is fixed at four days. (a) What is the reorder point if there is no safety stock? (b) What is the reorder point if the service level is 80 percent? (c) How much more safety stock is required if the service level is raised from 80 percent to 90 percent?arrow_forwardCompany B sold 50% of the 5,000 items that it carried last week. There were 500 items for which some demand was not satisfied. What is the stockout probability for last week? A) 10% B) 50% C) 85% D) 28%arrow_forward
- How are the reorder point and lead time related in inventory analysis?arrow_forwardDo you think the safety stock (safety inventory) could be negative? What is the meaning of a negative safety inventory (hint: safety stock is the difference between the optimal inventory and the average demand)?arrow_forwardThe concession stand at the Blacksburg High School stadium sells slices of pizza during soccergames. Concession stand sales are a primary source of revenue for high school athletic programs,so the athletic director wants to sell as much food as possible. However, any pizza notsold is given away to the players, coaches, and referees, or it is thrown away. The athletic directorwants to determine a reorder point that will meet, not exceed, the demand for pizza. Pizzasales are normally distributed, with a mean of 6 pizzas per hour and a standard deviation of2.5 pizzas. The pizzas are ordered from Pizza Town restaurant, and the mean delivery time is30 minutes, with a standard deviation of 8 minutes. Currently, the concession stand places an order when it has 1 pizza left. What level of service does this result in?arrow_forward
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