Principles of Operations Management: Sustainability and Supply Chain Management, Student Value Edition Plus MyLab Operations Management with Pearson eText -- Access Card Package (10th Edition)
10th Edition
ISBN: 9780134467283
Author: HEIZER, Jay, RENDER, Barry, Munson, Chuck
Publisher: PEARSON
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Chapter 12, Problem 45P
Summary Introduction
To determine: The safety stock.
Introduction: Inventory management is the process of ordering, storing and using inventory of the company such raw material, components and finished goods. It governs the flow of goods from manufacturers to warehouse and to the point of sale. The key function is to maintain record of flow of new or returned products which enters or leaves the company.
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Mr. Beautiful, an organization that sells weight trainingsets, has an ordering cost of $40 for the BB-1 set. (BB-1 stands forBody Beautiful Number 1.) The carrying cost for BB-1 is $5 per setper year. To meet demand, Mr. Beautiful orders large quantities ofBB-1 7 times a year. The stockout cost for BB-1 is estimated to be$50 per set. Over the past several years, Mr. Beautiful has observedthe following demand during the lead time for BB-1:Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â The reorder point for BB-1 is 60 sets. What level of safety stockshould be maintained for BB-I?
A pharmacist wants to establish an optimal inventory policy for a new antibiotic that requires refrigeration in storage. The pharmacist expects to sell 6000 packages of this antibiotic at a steady rate during the next year. She plans to place several orders of the same size spaced equally throughout the year. The ordering cost for each delivery is $15, and carrying​ costs, based on the average number of packages in​ inventory, amount to $8 per year for one package. Use this information to answer the following questions.
a) Let x be the order quantity and r the number of orders placed during the year. Find the inventory cost​ (ordering cost plus carrying​ cost) in terms of x and r.
b) Find the constraint function.
c) Determine the economic order quantity that minimizes the inventory cost and then find the minimum inventory cost. X=__________ C=$___________
​Sam's Pet Hotel operates
52
weeks per​ year,
6
days per​ week, and uses a continuous review inventory system. It purchases kitty litter for
​$13.00
per bag. The following information is available about these​ bags:
Â
≻Demand=75
​bags/week
≻Order
cost=​$55.00​/order
≻Annual
holding
cost=25
percent of cost
≻Desired
​cycle-service
level=80
percent
≻Lead
time=4
weeks
​(24
working​ days)
≻Standard
deviation of weekly
demand=15
bags
≻Current
​on-hand inventory is
320
​bags, with no open orders or backorders.
Part 2
a. Suppose that the weekly demand forecast of
75
bags is incorrect and actual demand averages only
50
bags per week. How much higher will total costs​ be, owing to the distorted EOQ caused by this forecast​ error?
Â
The costs will be
​$enter your response here
higher owing to the error in EOQ. ​(Enter your response rounded to two decimal​ places.)
a. What is the EOQ? What would the average time between orders (in weeks)?
b. What should R be?
c. An inventory withdraw…
Chapter 12 Solutions
Principles of Operations Management: Sustainability and Supply Chain Management, Student Value Edition Plus MyLab Operations Management with Pearson eText -- Access Card Package (10th Edition)
Ch. 12 - Ethical Dilemma Wayne Hills Hospital in tiny...Ch. 12 - Prob. 1DQCh. 12 - Prob. 2DQCh. 12 - What is the purpose of the ABC classification...Ch. 12 - Prob. 4DQCh. 12 - Explain the major assumptions of the basic EOQ...Ch. 12 - Prob. 6DQCh. 12 - Prob. 7DQCh. 12 - Prob. 8DQCh. 12 - What impact does a decrease in setup time hive on...
Ch. 12 - Prob. 10DQCh. 12 - Prob. 11DQCh. 12 - Explain the following: All things being equal, the...Ch. 12 - Prob. 13DQCh. 12 - Prob. 14DQCh. 12 - Prob. 15DQCh. 12 - When demand is not constant, the reorder point is...Ch. 12 - Prob. 17DQCh. 12 - State a major advantage, and a major disadvantage,...Ch. 12 - L. Houts Plastics it a large manufacturer of...Ch. 12 - Prob. 2PCh. 12 - Jean-Mane Bourjollys restaurant has the following...Ch. 12 - Lindsay Electronics, a small manufacturer of...Ch. 12 - William Sevilles computer training school, in...Ch. 12 - Prob. 8PCh. 12 - Prob. 9PCh. 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 - Prob. 16PCh. 12 - Prob. 17PCh. 12 - Prob. 18PCh. 12 - Prob. 19PCh. 12 - Prob. 20PCh. 12 - Cesar Rego Computers, a Mississippi chain of...Ch. 12 - Prob. 22PCh. 12 - Prob. 23PCh. 12 - Prob. 24PCh. 12 - Prob. 25PCh. 12 - M. P. VanOyen Manufacturing has gone out on bid...Ch. 12 - Chris Sandvig Irrigation, Inc., has summarized the...Ch. 12 - Prob. 28PCh. 12 - Prob. 29PCh. 12 - Prob. 30PCh. 12 - Barbara Flynn is in charge of maintaining hospital...Ch. 12 - Prob. 42PCh. 12 - Authentic Thai rattan chairs (shown in the photo)...Ch. 12 - Prob. 44PCh. 12 - Prob. 45PCh. 12 - Prob. 46PCh. 12 - Prob. 47PCh. 12 - Gainesville Cigar stocks Cuban agars that have...Ch. 12 - A gourmet coffee shop in downtown San Francisco is...Ch. 12 - Prob. 51PCh. 12 - Henrique Correas bakery prepares all its cakes...Ch. 12 - Prob. 53PCh. 12 - Prob. 1.1CSCh. 12 - Prob. 1.2CSCh. 12 - Prob. 1.3CSCh. 12 - Prob. 2.1CSCh. 12 - Prob. 2.2CSCh. 12 - Prob. 2.3CSCh. 12 - Managing Inventory at Frito-Lay Frito-Lay hat...Ch. 12 - Prob. 1.2VCCh. 12 - Prob. 1.3VCCh. 12 - Prob. 1.4VCCh. 12 - Prob. 1.5VCCh. 12 - Prob. 1.6VCCh. 12 - Managing Inventory at Frito-Lay Frito-Lay hat...Ch. 12 - Inventory Control at Wheeled Coach Controlling...Ch. 12 - Prob. 2.2VCCh. 12 - Inventory Control at Wheeled Coach Controlling...
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