Principles of Operations Management: Sustainability and Supply Chain Management (10th Edition)
10th Edition
ISBN: 9780134181981
Author: Jay Heizer, Barry Render, Chuck Munson
Publisher: PEARSON
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Chapter 12, Problem 49P
A gourmet coffee shop in downtown San Francisco is open 200 days a year and sells an average of 75 pounds of Kona coffee beans a day. (Demand can be assumed to be distributed normally, with a standard deviation of 15 pounds per day.) After ordering (fixed cost = $16 per order), beans are always shipped from Hawaii within exactly 4 days. Per-pound annual holding costs for the beans are $3.
a) What is the economic order quantity (EOQ) for Kona coffee beans?
b) What are the total annual holding costs of stock for Kona coffee beans?
c) What are the total annual ordering costs for Kona coffee beans?
d) Assume that management has specified that no more than a 1% risk during stockout is acceptable. What should the reorder point (ROP) be?
e) What is the safety stock needed to attain a 1% risk of stockout during lead time?
f) What is the annual holding cost of maintaining the level of safety stock needed to support a 1% risk?
g) If management specified that a 2% risk of stockout during lead time would be acceptable, would the safety stock holding costs decrease or increase?
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A gourmet coffee shop in downtown San Francisco is open 200 days a year and sells an average of 75 pounds of Kona coffee beans a day. (Demand can be assumed to be distributed normally, with a standard deviation of 15 pounds per day.) After ordering (fixed cost 5 $16 per order), beans are always shipped from Hawaii within exactly 4 days. Per-pound annual holding costs for the beans are $3.
a) What is the economic order quantity (EOQ) for Kona coffee beans?
b) What are the total annual holding costs of stock for Kona coffee beans?
c) What are the total annual ordering costs for Kona coffee beans?
d) Assume that management has specified that no more than a 1% risk during stockout is acceptable. What should the reorder point (ROP) be?
e) What is the safety stock needed to attain a 1% risk of stockout during lead time?
f ) What is the annual holding cost of maintaining the level of safety stock needed to support a 1% risk?
g) If management specified that a 2% risk of stockout during lead…
32) ABC Shop
ABC shop uses glue at a daily rate that is normally distributed with a mean of 250 ounces and a standard deviation of 26 ounces. When the shop places an order for glue it requires 9 days for the order to arrive.
What is the Reorder Point if the shop wants an 84% Service Level? Round to an integer value.
Group of answer choices
a) 2,347 ounces
b) 1,538 ounces
c) 1,967 ounces
d) 2,307 ounces
e) 2,327 ounces
f) 1,558 ounces
The annual demand for sugar at a local soft drink company is
normally distributed with a mean of 800 tons and a standard
deviation of 25 tons. The sugar sells for OMR 500 each ton, and
the annual inventory holding cost rate is 10%. Ordering costs are
OMR5 per order. The delivery time for sugar is 5 working days.
Assume that there are 250 working days in a year.
1. Determine the optimal order quantity.
2. What size of safety stock should the company keep at a
service-level of 90%?
3. Suppose they keep 8 extra tons in inventory as a safety
stock. What is the service-level obtained?
4. Evaluate the fill rate Beta for a safety stock of 5 tons.
5. What is the expected number of units short per year?
6. Compare the level of safety stock for each policy =Beta=0.95.
Chapter 12 Solutions
Principles of Operations Management: Sustainability and Supply Chain Management (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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