CONNECT F/OPERATIONS MGMT
14th Edition
ISBN: 9781264344963
Author: Stevenson
Publisher: INTER MCG
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Textbook Question
Chapter 12, Problem 20P
Given this information:
Lead-time demand = 600 pounds
Standard deviation of lead time demand = 52 pounds (Assume normality.)
Acceptable stockout risk during lead time = 4 percent
a. What amount of safety stock is appropriate?
b. When should this item be reordered?
c. What risk of stockout would result from a decision not to have any safety stock?
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Given this information:Lead-time demand = 615 poundsStandard deviation of lead time demand = 48 pounds (Assume normality.)Acceptable stockout risk during lead time = 4 percentUse Table. a. What amount of safety stock is appropriate? (Round your answer to the nearest whole number.) Safety stock units b. How much of this item should be reordered? (Round your answer to the nearest whole number.) ROP units c. What risk of stockout would result from a decision not to have any safety stock? (Omit the "%" sign in your response.) Stockout risk %
The following data are for an inventory item in which the EOQ model applies: Given: D = 10,000 units (annual demand) R = P10 per unit P = P500 per order C = 25% 0f average inventory Find:
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EOQ, reorder point, and safety stock Alexis Company uses 937units of a product per year on a continuous basis. The product has a fixed cost of $44 per order, and its carrying cost is $4 per unit per year. It takes 5 days to receive a shipment after an order is placed, and the firm wishes to hold 10 days' usage in inventory as a safety stock.
a. Calculate the EOQ.
b. Determine the average level of inventory. (Note: Use a 365-day year to calculate daily usage.)
c. Determine the reorder point.
d. Indicate which of the following variables change if the firm does not hold the safety stock: (1) order cost, (2) carrying cost, (3) total inventory cost, (4) reorder point, (5) economic order quantity.
Chapter 12 Solutions
CONNECT F/OPERATIONS MGMT
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