Operations Management: Sustainability And Supply Chain Management Custom Edition For Temple University, Version 3
11th Edition
ISBN: 9781269383578
Author: HEIZER
Publisher: PEARSON
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Textbook Question
Chapter 12, Problem 32P
Question
•• 12.32 Chicago’s Hard Rock Hotel distributes a mean of 1,000 bath towels per day to guests at the pool and in their rooms. This demand is
- a. What is the safety stock?
- b. What is the ROP?
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Question 31
Firm B's demand for a product is 10 units per month. Its supplier charges an ordering cost of $5 per order and $10 per unit with a 10% discount for orders of 25 units or higher. Firm B incurs a 30% annual holding cost. How much does Firm B save each year (including purchasing, ordering, and holding costs) if it purchases enough units to get the discount?
Group of answer choices
$2.25
$6.00
$120.00
$122.25
Question 6 (ABC Analysis)
Use the information provided below and classifies the inventory items according to the ABC classification.
Item:
Annual demand:
Unit Price N$:
1
1000
0.50
2
100
250
3
50
1000
4
50
800
5
300
50
6
500
10
7
500
7
Question 4An electronics shop sells 6000 headphones in a year and the sales is relatively constantthroughout the year. These headphones are purchased for SR 20.00 each, and the leadtime is three days. The holding cost per headphone per year is 10% of the unit cost andthe ordering cost per order is SR 75. There are 300 working days per year. Calculate thefollowing:(i) What is the annual holding cost?(ii) In minimizing the cost, how many orders would be made each year?(iii) Given the EOQ, what is the total annual inventory cost (including purchase cost)?(iv) What is the time between orders?(v) What is the ROP?
Chapter 12 Solutions
Operations Management: Sustainability And Supply Chain Management Custom Edition For Temple University, Version 3
Ch. 12 - Question 1. Describe the four types of inventory.Ch. 12 - Question
2. With the advent of low-cost...Ch. 12 - Question
3. What is the purpose of the ABC...Ch. 12 - Question
4. Identify and explain the types of...Ch. 12 - Question 5. Explain the major assumptions of the...Ch. 12 - Question 6. What is the relationship of the...Ch. 12 - Question
7. Explain why it is not necessary to...Ch. 12 - Question 8. What are the advantages of cycle...Ch. 12 - What impact does a decrease in setup time have on...Ch. 12 - When quantity discounts are offered, why is it not...
Ch. 12 - What is meant by service level?Ch. 12 - Explain the following: All things being equal, the...Ch. 12 - Describe the difference between a fixed-quantity...Ch. 12 - Explain what is meant by the expression robust...Ch. 12 -
15. What is “safety stock”? What does safety...Ch. 12 - When demand is not constant, the reorder point is...Ch. 12 - How are inventory levels monitored in retail...Ch. 12 - State a major advantage, and a major disadvantage,...Ch. 12 - L. Houts Plastics is a large manufacturer of...Ch. 12 - Boreki Enterprises has the following 10 items in...Ch. 12 - Jean-Marie Bourjollys restaurant has the following...Ch. 12 - Lindsay Electronics, a small manufacturer of...Ch. 12 - William Bevilles computer training school, in...Ch. 12 - • 12.6 If D = 8,000 per month, S = $45 per order,...Ch. 12 - Henry Crouchs law office has traditionally ordered...Ch. 12 - Matthew Liotines Dream Store sells beds and...Ch. 12 - Southeastern Bell stocks a certain switch...Ch. 12 - Lead time for one of your fastest-moving products...Ch. 12 - Annual demand for the notebook binders at Duncans...Ch. 12 - Thomas Kratzer is the purchasing manager for the...Ch. 12 - Joe Henrys machine shop uses 2,500 brackets during...Ch. 12 - Abey Kuruvilla, of Parkside Plumbing, uses 1,200...Ch. 12 - ••• 12.15 M. Cotteleer Electronics supplies...Ch. 12 - •• 12.16 Race One Motors is an Indonesian car...Ch. 12 - Radovilsky Manufacturing Company, in Hayward,...Ch. 12 - Arthur Meiners is the production manager of...Ch. 12 - Cesar Rego Computers, a Mississippi chain of...Ch. 12 - Bell Computers purchases integrated chips at 350...Ch. 12 - Wang Distributors has an annual demand for an...Ch. 12 - Question 12.22 The catering manager of La Vista...Ch. 12 - Prob. 23PCh. 12 - Prob. 24PCh. 12 - Prob. 25PCh. 12 - Question 12.26 Emery Pharmaceutical uses an...Ch. 12 - Question 12.27 Barbara Flynn is in charge of...Ch. 12 - Question 12.28 Based on available information,...Ch. 12 - Question 12.29 Authentic Thai rattan chairs...Ch. 12 - Question 12.30 Tobacco is shipped from North...Ch. 12 - Prob. 31PCh. 12 - Question 12.32 Chicagos Hard Rock Hotel...Ch. 12 - Question 12.33 First Printing has contracts with...Ch. 12 - Prob. 34PCh. 12 - Prob. 35PCh. 12 - Question 12.36 Cynthia Knotts oyster bar buys...Ch. 12 - Question 12.37 Henrique Correas bakery prepares...Ch. 12 - Question 12.38 University of Florida football...Ch. 12 - Prob. 39PCh. 12 - Question 12.40 A gourmet coffee shop in downtown...Ch. 12 - Question Zhou Bicycle Company Zhou Bicycle...Ch. 12 - Question Zhou Bicycle Company Zhou Bicycle...Ch. 12 - Question Zhou Bicycle Company Zhou Bicycle...Ch. 12 - Parker Hi-Fi Systems Parker Hi-Fi Systems, located...Ch. 12 - Parker Hi-Fi Systems Parker Hi-Fi Systems, located...Ch. 12 - Parker Hi-Fi Systems Parker Hi-Fi Systems, located...Ch. 12 - Question Frito-Lay has flourished since its...Ch. 12 - Question Frito-Lay has flourished since its...Ch. 12 - Question Frito-Lay has flourished since its...Ch. 12 - Question Frito-Lay has flourished since its...Ch. 12 - Question Frito-Lay has flourished since its...Ch. 12 - Question Frito-Lay has flourished since its...Ch. 12 - Question Frito-Lay has flourished since its...Ch. 12 - Inventory Control at Wheeled Coach Video Case...Ch. 12 - Prob. 2.2VCCh. 12 - Prob. 2.3VC
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- Question 103 If a firm allows a safety stock of 55 days, and annual sales in are 65,000 units, price per unit is $25, carrying costs are 30%, and fixed costs per order is $100, then orders per year is 600. TRUE OR FALSE?arrow_forwardQuestion2: A company that sells fruit juices sells 1250 cases of fruit juice from cases priced at $50 per case in a month. The business is in city x and juices are ordered from city y. Each order costs the business $250. Storage costs are 20% of a case of fruit juice. According to this;a) the economic order quantity of the enterprise?b) How many days is the time between two orders?c) What is the total inventory cost of the business, including the acquisition costs, in dollars/month?arrow_forwardQUESTION THREE Inventory is one of the dominant costs in many industries and supply chains. In 1984 General Motors of the USA distribution network consisted of 20,000 supplier plants, 133 parts plants, 31 assembly plants and 11000 car dealers. The total worth of the company consisted of 70% attributable to Inventory level. Requirements: Outline Inventory Drivers (Why Holding) Inventories, in a company like GM? ABC Inventory Management System is one of the Inventory Control System available in industry. Explain the ABC inventory Management System and how it can be used to manage or control Inventory in Industry Safety Inventory, is one way of managing Uncertainty in the supply Chain What do you understand by the term Safety Inventory / Safety Stock [ With aid of an example, explain how safety Inventory or stock is used in managing Uncertainty in the supply chainarrow_forward
- QUESTION 1:A confectioner buys plastic boxes in bulk and uses them to pack chocolates. The annual requirement of these boxes is 1,200, and each box costs $30. The ordering and carrying costs are $10 per order and 20%, respectively. The supplier from whom the confectioner purchases these boxes sells them only in lots of 25, that is, you only purchase quantities in multiples of 25 boxes.(a) How many boxes should the confectioner order so as to minimise inventory total stocking costs?(b) If the supplier offers 2% discount on the cost of each box when the purchases are in quantities of 300 at a time, should the confectioner accept this offer?(c) Suppose the supplier has decided that instead of the 2% discount offer the following price breaks will be used:ORDER QUANTITY COST PER BOXLess than 100 $30.00100 to 199 $29.75200 or more $29.60What order quantity should the confectioner make?arrow_forwardQuestion 8 What of the following best describes just-in-time inventory management? A firm minimises the time lags present in the supply chain by maintaining a certain amount of inventory to use in these lag times Inventory is maintained as a buffer to meet uncertainties in demand, supply, and movements of goods Production inefficiencies arising when production capacity stands idle for lack of materials are minimised by holding a small stock of essentials at all times A firm acquires inventory precisely when needed so that its inventory balance is always at, or close to, zeroarrow_forwardQuestion 1 The Jelly Bean operation holds an inventory of food colouring which used to colour the jelly beans. The jelly bean operation is interested in calculating the optimal ordering strategy for food colouring. Suppose the annual forecast for the necessary food colouring during a normal year of operation is 13491 litres per year. Furthermore, suppose the holding cost per litre of paint is $11.4 and every time the jelly bean operation issues an order to their supplier, a charge of $451 is added to the invoice as an ordering cost. The supplier charges $5.63 per litre of food colouring. Using the Economic Order Quantity formula, what is the optimal order size that minimises total cost (in Litres of food colouring per order)? a. 1265 litres b. 736 litres c. 1067446 litres d. 26 litres e. 1033 litres Question 2 Using the Economic Order Quantity formula and the data provided above, how many orders will have to be made in a single year? The choices below are all rounded to the nearest…arrow_forward
- Explain periodic order quantity (POQ)?arrow_forwardQuestion: Research about ABC Analysis of Inventory management and then describe its salient features.arrow_forwardQuestion 30 Store A purchases cases of fertilizer for its lawn-care business from a supplier who charges Store A $30 per order and $50 per case. Each case consists of five bags of fertilizer. Store A needs 2,000 bags of fertilizer a year. Store A's annual holding costs are 30%. If Store A's order quantity is 20 cases, what is its average inventory level? Group of answer choices 10 40 25 20arrow_forward
- Question 29 Store A purchases cases of fertilizer for its lawn-care business from a supplier who charges Store A $30 per order and $50 per case. Each case consists of five bags of fertilizer. Store A needs 2,000 bags of fertilizer a year. How many orders does Store A place per year if the order quantity is 20 cases? Group of answer choices 80 40 20 10arrow_forwardQuestion 4 Illustrate Guardian pharmacy’s reorder system to manage their inventory so meet customer expectation. answer guidelines To use order point system and periodic review system. Illustrate its characteristics/advantage in the context of managing inventory in a pharmacy. For example: 1. Order point system - When the quantity of an item on hand in inventory falls to a predetermined level, an order is placed. • The quantity ordered is based on economic order quantity (EOQ). • Order quantity are usually fixed. • The order point is determined by the average demand during the lead time. • If the average demand or the lead time changes, there is no corresponding change in the order point, effectively there is a change in the safety stock. • The interval between replenishment are not constant but vary depending on the actual demand during the order cycle. Usually used for stocks that are longer to sell from the store so to…arrow_forwardQuestion 5 Safety Stock Model Consider the following information on an inventory management system (one year is 50 weeks, one year is 365 days and 1 week is 7 days): Item Cost:$10 Order Cost:$250 Annual Holding Cost:33% of item cost Average Demand:515 per week Std. Dev. of Demand:125 per week Lead time:14 days a) Ignoring the uncertainty in the demand (i.e. looking only at average values), find the optimal order quantity and the reorder point. b) Consider now the uncertainty. The order quantity remains the same. If the target is to have a 98% annual service level, what should be the ROP? What is the safety stock? c) If the ROP is 1178 units (note that z value has been changed), what is the corresponding annual service level that the firm can provide?arrow_forward
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