The optimal stocking level. Introduction : Inventory is a stock or store of goods. Every company store lots of goods as inventory which will be used during replenishment periods. Management of inventory is so much essential to manage cost and also to reduce cost.

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Chapter 12, Problem 39P

Summary Introduction

To determine: The optimal stocking level.

Introduction: Inventory is a stock or store of goods. Every company store lots of goods as inventory which will be used during replenishment periods. Management of inventory is so much essential to manage cost and also to reduce cost.

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The Olde Town Microbrewery makes Townside beer,which it bottles and sells in its adjoining restaurant and bythe case. It costs $1700 to set up, brew, and bottle a batchof the beer. The annual cost to store the beer in inventory is$1.25 per bottle. The annual demand for the beer is 21,000bottles and the brewery has the capacity to produce 30,000bottles annually.a. Determine the optimal order quantity, total annual inventory cost, the number of production runs per year, andthe maximum inventory level.b. If the microbrewery has only enough storage space tohold a maximum of 2500 bottles of beer in inventory,how will that affect total inventory costs?

The annual demand for a product is 15,600 units. The weekly demand is 300 units with a standard deviation of 90 units. The cost to place an order is $32.00, and the time from ordering to receipt is four weeks. The annual inventory carrying cost is $0.20 per unit. The reorder point necessary to provide a 98 percent service probability is 1,569 units. Suppose the production manager is asked to reduce the safety stock of this item by 55 percent. If she does so, what will the new service probability be? Use Excel's NORM.S.DIST() function to find the correct probability for your computed z value.

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 optimal order size

Answer 2

Question

Chapter 12, Problem 39P

Summary Introduction

To determine: The optimal stocking level.

Introduction: Inventory is a stock or store of goods. Every company store lots of goods as inventory which will be used during replenishment periods. Management of inventory is so much essential to manage cost and also to reduce cost.

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Answer 3

Question

Chapter 12, Problem 39P

Summary Introduction

To determine: The optimal stocking level.

Introduction: Inventory is a stock or store of goods. Every company store lots of goods as inventory which will be used during replenishment periods. Management of inventory is so much essential to manage cost and also to reduce cost.

Expert Solution & Answer

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Answer 4

Question

Chapter 12, Problem 39P

Summary Introduction

To determine: The optimal stocking level.

Introduction: Inventory is a stock or store of goods. Every company store lots of goods as inventory which will be used during replenishment periods. Management of inventory is so much essential to manage cost and also to reduce cost.

Expert Solution & Answer

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Answer 5

Chapter 12, Problem 39P

Summary Introduction

To determine: The optimal stocking level.

Introduction: Inventory is a stock or store of goods. Every company store lots of goods as inventory which will be used during replenishment periods. Management of inventory is so much essential to manage cost and also to reduce cost.

Answer 6

Chapter 12, Problem 39P

Summary Introduction

To determine: The optimal stocking level.

Introduction: Inventory is a stock or store of goods. Every company store lots of goods as inventory which will be used during replenishment periods. Management of inventory is so much essential to manage cost and also to reduce cost.

Answer 7

Chapter 12, Problem 39P

Summary Introduction

To determine: The optimal stocking level.

Introduction: Inventory is a stock or store of goods. Every company store lots of goods as inventory which will be used during replenishment periods. Management of inventory is so much essential to manage cost and also to reduce cost.

Answer 8

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Answer 11

Ch. 12.3 - Prob. 1RQ Ch. 12 - What are the primary reasons for holding...Ch. 12 - What are the requirements for effective inventory...Ch. 12 - Briefly describe each of the costs associated with...Ch. 12 - What potential benefits and risks do RFID tags...Ch. 12 - Prob. 5DRQ Ch. 12 - Prob. 6DRQ Ch. 12 - a. List the major assumptions of the EOQ model. b....Ch. 12 - Explain briefly how a higher carrying cost can...Ch. 12 - What is safety stock, and what is its purpose?

The optimal stocking level. Introduction : Inventory is a stock or store of goods. Every company store lots of goods as inventory which will be used during replenishment periods. Management of inventory is so much essential to manage cost and also to reduce cost.

Solution Summary: The author explains the optimal stocking level, which is 421.5 pounds. Management of inventory is essential to manage cost and reduce cost.

Concept explainers

Videos

To determine: The optimal stocking level.

Introduction: Inventory is a stock or store of goods. Every company store lots of goods as inventory which will be used during replenishment periods. Management of inventory is so much essential to manage cost and also to reduce cost.

Want to see the full answer?

Chapter 12 Solutions

The optimal stocking level. Introduction : Inventory is a stock or store of goods. Every company store lots of goods as inventory which will be used during replenishment periods. Management of inventory is so much essential to manage cost and also to reduce cost.

Solution Summary: The author explains the optimal stocking level, which is 421.5 pounds. Management of inventory is essential to manage cost and reduce cost.

Concept explainers

Videos

To determine: The optimal stocking level. Introduction: Inventory is a stock or store of goods. Every company store lots of goods as inventory which will be used during replenishment periods. Management of inventory is so much essential to manage cost and also to reduce cost.

Want to see the full answer?

Chapter 12 Solutions

To determine: The optimal stocking level.

Introduction: Inventory is a stock or store of goods. Every company store lots of goods as inventory which will be used during replenishment periods. Management of inventory is so much essential to manage cost and also to reduce cost.