EP PRIN.OF OPERATIONS MGMT.-MYOMLAB
10th Edition
ISBN: 9780134183848
Author: HEIZER
Publisher: PEARSON CO
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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…
the economic order quantity (see Chapter 12 for EOQformulas) for its halogen lamps. It currently buys all halogenlamps from Specialty Lighting Manufacturers in Atlanta. Annualdemand is 2,000 lamps, ordering cost per order is $30, and annualcarrying cost per lamp is $12.a) What is the EOQ?b) What are the total annual costs of holding and ordering(managing) this inventory?c) How many orders should D iscount-Mart place with SpecialtyLighting per year?
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
EP PRIN.OF OPERATIONS MGMT.-MYOMLAB
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