Practical Management Science, Loose-leaf Version
5th Edition
ISBN: 9781305631540
Author: WINSTON, Wayne L.; Albright, S. Christian
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Question
Chapter 12.5, Problem 14P
Summary Introduction
To determine: The optimal order quantity using @RISK.
Introduction: Simulation model is the digital prototype of the physical model that helps to
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
3. Gursoy is selling Christmas trees. She purchases trees for $10 and sells for $25
each. The number of trees she can sell is normally distributed with a mean of 100
and standard deviation of 30. How many trees should Gursoy purchase?
Zack Pop has been a producing plant production manager for the last 10 years. One produce item, zucchini, is sold in cases, with daily sales averaging 400 cases. Daily sales are also assumed to be normally distributed. Furthermore, 85% of the time sales are between 350 and 450 cases. Each case is purchased for $10 wholesale and sells for $15 retail. All cases that are not sold must be discarded.
1) Estimate the standard deviation of the sales distribution.
2) Using the standard deviation found in part a, determine how many cases of zucchini Zach should stock.
In a production phase, a corporation requires 85 circuit boards every day.This is the maxim that the individual who orders the boards follows: When the number of boards on hand reaches 625, place an order. Orders are usually shipped six days after they are placed. With a mean of six days and a standard deviation of 1.10 days, the distribution period is average. If circuit boards are reordered as the number on hand decreases to 625, what is the likelihood that the stock will be depleted before the order is received?
Chapter 12 Solutions
Practical Management Science, Loose-leaf Version
Ch. 12.4 - Prob. 1PCh. 12.4 - Prob. 2PCh. 12.4 - Prob. 3PCh. 12.4 - Prob. 4PCh. 12.4 - Prob. 5PCh. 12.4 - Prob. 6PCh. 12.4 - Prob. 7PCh. 12.4 - Prob. 8PCh. 12.4 - Prob. 9PCh. 12.4 - Prob. 10P
Ch. 12.4 - Prob. 11PCh. 12.5 - Prob. 12PCh. 12.5 - Prob. 13PCh. 12.5 - Prob. 14PCh. 12.5 - Prob. 15PCh. 12.5 - Prob. 16PCh. 12.5 - Prob. 17PCh. 12.5 - Prob. 18PCh. 12.5 - Prob. 19PCh. 12.5 - Prob. 20PCh. 12.5 - Prob. 21PCh. 12 - Prob. 27PCh. 12 - Prob. 28PCh. 12 - Prob. 29PCh. 12 - Prob. 30PCh. 12 - Prob. 31PCh. 12 - Prob. 32PCh. 12 - Prob. 33PCh. 12 - Prob. 34PCh. 12 - Prob. 35PCh. 12 - Prob. 36PCh. 12 - Prob. 38PCh. 12 - Prob. 39PCh. 12 - Prob. 40PCh. 12 - Prob. 42PCh. 12 - Prob. 43PCh. 12 - Prob. 44PCh. 12 - Prob. 45PCh. 12 - Prob. 46PCh. 12 - Prob. 47PCh. 12 - Prob. 48PCh. 12 - Prob. 49PCh. 12 - Prob. 53PCh. 12 - Prob. 54PCh. 12 - In terms of K, D, and h, what is the average...Ch. 12 - Prob. 56PCh. 12 - Prob. 57PCh. 12 - Prob. 58PCh. 12 - Prob. 59PCh. 12 - Prob. 60PCh. 12 - Prob. 61PCh. 12 - Prob. 62PCh. 12 - Prob. 63PCh. 12 - Prob. 64PCh. 12 - Prob. 65PCh. 12 - Prob. 66PCh. 12 - Prob. 67PCh. 12 - Prob. 68PCh. 12 - Prob. 69PCh. 12 - Prob. 70PCh. 12 - Prob. 71PCh. 12 - Prob. 1.1CCh. 12 - Prob. 1.2CCh. 12 - Prob. 1.3C
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, operations-management and related others by exploring similar questions and additional content below.Similar questions
- Assume the demand for a companys drug Wozac during the current year is 50,000, and assume demand will grow at 5% a year. If the company builds a plant that can produce x units of Wozac per year, it will cost 16x. Each unit of Wozac is sold for 3. Each unit of Wozac produced incurs a variable production cost of 0.20. It costs 0.40 per year to operate a unit of capacity. Determine how large a Wozac plant the company should build to maximize its expected profit over the next 10 years.arrow_forwardA company needs to order raw material and demand is forecast to be normally distributed with a mean of 250 gallons and standard deviation of 100 gallons. One gallon of raw material produces one gallon of product and the product sells for $25/gallon. Raw material costs $10/gallon but the company must also spend $5/gallon for disposal of any UNUSED raw material. If demand is higher than production capacity, the company sells what it can make and loses the rest of demand. a) If they buy 400 gallons of raw material, how much should they expect to spend on disposal costs (in $)? b) To have a 92% probability of satisfying demand, how many gallons of raw material should be bought?arrow_forwardWhich of the following is NOT a determinant of the demand for good X?arrow_forward
- 15) JBs needs to determine what quantity of a new tennis racquet to order for the upcoming summer season. They sell the racquet for $110 and procure it from their supplier for $70. Any leftovers will be marked down 60% and are expected to all sell at that price. Anticipated demand is modeled with a normal distribution where the mean is 120 and the standard deviation is 25. How many racquets should JBs order if they want to meet a 95% target fill rate? A) 130 C) 162 B) 127 D) 149arrow_forwardA manufacturer of industrial sales has production capacity of 1,000 units per day. Currently, the firm sells production capacity for $10 per unit. At this price, all production capacity gets booked about one week in advance. A group of customers have said that they would be willing to pay $15 per unit if capacity was available on the last day. About ten days in advance, demand for the high-price segment is normally distributed with a mean of 250 and a standard deviation of 100. How much production capacity should the manufacturer reserve for the last day? Show the answer clearly.arrow_forwardA company uses 85 circuit boards a day in a manufacturing process. The person who ordersthe boards follows this rule: Order when the amount on hand drops to 625 boards. Orders are delivered approximately six days after being placed. The delivery time is normal with a mean ofsix days and a standard deviation of 1.10 days. What is the probability that the supply of circuitboards will be exhausted before the order is received if boards are reordered when the amount onhand drops to 625 boards?arrow_forward
- Annual demand for number 2 pencils at the campus store is normallydistributed with mean 1,000 and standard deviation 250. The store purchases the pencils for 6 cents each and sells them for 20 cents each. There is a two-month lead time from the initiation to the receipt of an order. The store accountant estimates that the cost in employee time for performing the necessary paperwork to initiate and receive an order is $20, and recommends a 22 percent annual interest rate for determining holding cost. The cost of a stock-out is the cost of lost profit plus an additional 20 cents per pencil, which represents the cost of loss of goodwill.a. Find the optimal value of the reorder point R assuming that the lot size used is the EOQ.b. Find the simultaneous optimal values of Q and R.c. Compare the average annual holding, setup, and stock-out costs of the policies determined in parts (a) and (b).d. What is the safety stock for this item at the optimal solution?arrow_forwardThe purpose of this assignment is to know how to apply normal probability distribution concepts to a real business case. The case study starts under Unit 4. and Unit 4.1 is the continuation. Describe a normal probability distribution that can be used to approximate the demand distribution. Sketch the distribution and show its mean and standard deviation. Compute the probability of a stock-out for the order quantities suggested by members of management team.arrow_forwardFlora Co sells bunches of fresh flowers which have a limited shelf life so forecasting sales demand is extremely important for maximising profits. Quarter 1 Quarter 1 contains a national holiday and as a result sales of a particular red flower are usually very high. Sales of the red flower will depend on market conditions. After the national holiday there will be no demand for the red flowers and they will be thrown away. Flora Co must decide whether to purchase 250 bunches, 400 bunches or 500 bunches of the red flowers from its supplier for re-sale to its customers. The following payoff table has been produced: Market conditions Poor Good Excellent Expected value Probability 0.20 0.25 0.55 Number of bunches to be bought from supplier 400 $900 $3,900 $3,900 250 $2,400 $2,400 $2,400 $2,400 $3,300 500 ($100) $2,900 $4,900 $3,400arrow_forward
- Ken Ells, owner, and operator of Kennels, Inc. is concerned that the person in charge of ordering dog food is often incurring an order expediting expense because he is waiting too long (letting the inventory level drop too low) before ordering. Past data indicates that demand during the lead time (when expediting does not occur) is normally distributed with a mean of 340 pounds and a standard deviation of 45 pounds. Ken wants the probability of running out of dog food to be .03. a. If the current order point is 400 pounds, what is the resulting service level? b. If Ken wants a service level of 97% for dog food, what should be the order point? Please show a correct solution. Thank you.arrow_forwardPlease do not give solution in image format thanku Deltic sells this component for 55 per unit with a 4-month delivery lead time. Assume Deltic covers all transportation and related processing until delivery. TCX’s demand forecast for the upcoming selling season (12 months) is a normal distribution with mean 13500 and standard deviation 3736,4 . TCX sells each unit, after integrating their proprietary software, for 135. Assume that TCX uses a holding cost rate of 25 %, and any leftover units can be sold for 30 on average. Due to the long lead time and high minimum order quantity required, TCX is planning on a single order from Deltic to meet their needs in the next year. How many of these components should TCX order? Calculate the resulting expected annual profits for TCX.arrow_forwardAnnual demand for number 2 pencils at the campus store is normallydistributed with mean 1,000 and standard deviation 250. The store purchases thepencils for 6 cents each and sells them for 20 cents each. There is a two-monthlead time from the initiation to the receipt of an order. The store accountantestimates that the cost in employee time for performing the necessary paperworkto initiate and receive an order is $20, and recommends a 22 percent annual interest rate for determining holding cost. The cost of a stock-out is the cost of lostprofit plus an additional 20 cents per pencil, which represents the cost of loss ofgoodwill.b. Find the simultaneous optimal values of Q and R.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Practical Management ScienceOperations ManagementISBN:9781337406659Author:WINSTON, Wayne L.Publisher:Cengage,
Practical Management Science
Operations Management
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:Cengage,
Single Exponential Smoothing & Weighted Moving Average Time Series Forecasting; Author: Matt Macarty;https://www.youtube.com/watch?v=IjETktmL4Kg;License: Standard YouTube License, CC-BY
Introduction to Forecasting - with Examples; Author: Dr. Bharatendra Rai;https://www.youtube.com/watch?v=98K7AG32qv8;License: Standard Youtube License