OPERATIONS MANAGEMENT (LL)-W/ACCESS
17th Edition
ISBN: 9781260037821
Author: CACHON
Publisher: MCG
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Chapter 14, Problem 2PA
Summary Introduction
To identify: The statement that is definitely not true.
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You are conducting a retrospective analysis for an Order-Up-To system (thus, the unsold inventory at the end of a week is carried over to the next week). The beginning inventory in week 1 is 150 units, the demand in week 1 is 180 units and the demand during week 2 is 250 units. If you receive a shipment of 115 units every week, at the end of week 2,
the inventory level is 180
the inventory level is 200
the inventory level is 310
the backorder level is 30
the backorder level is 50
none of the above is correct
Which of the following assumptions is not one of the Economic Order Quantity Model assumptions, which is the most basic of the Inventory models?
a) No out of stock allowed
B) Materials must be delivered in one go c) Ordening and receving times are known and fixed
d) The supplier is allowed to make a dscourt based on the order quuantity
e) Demand is known and foxed
[item no.13] Which of the following is true about the Production Run Model?
a. Total cost is minimized when annual ordering cost is greater than the carrying cost.
b. The maximu inventory level is equal to the number of pieces per production run.
c. The maximum inventory level is equal to the total produced during the production run minus the total used during the production run.
d. It requires the instantaneous inventory receipt assumption.
Chapter 14 Solutions
OPERATIONS MANAGEMENT (LL)-W/ACCESS
Ch. 14 - Demand in each period follows the same normal...Ch. 14 - Prob. 2CQCh. 14 - For products with slow-moving demandfor example,...Ch. 14 - Prob. 4CQCh. 14 - Prob. 5CQCh. 14 - Prob. 6CQCh. 14 - Prob. 7CQCh. 14 - Prob. 8CQCh. 14 - If the target in-stock probability increases, then...Ch. 14 - Prob. 10CQ
Ch. 14 - Prob. 11CQCh. 14 - Prob. 12CQCh. 14 - Prob. 13CQCh. 14 - Prob. 14CQCh. 14 - Prob. 15CQCh. 14 - Prob. 16CQCh. 14 - Prob. 17CQCh. 14 - Prob. 18CQCh. 14 - Prob. 19CQCh. 14 - Prob. 1PACh. 14 - Prob. 2PACh. 14 - Prob. 3PACh. 14 - You are the owner of Hotspices.com, an online...Ch. 14 - Prob. 5PACh. 14 - Prob. 6PACh. 14 - Prob. 7PACh. 14 - Prob. 1CCh. 14 - Prob. 2CCh. 14 - Prob. 3CCh. 14 - CASE WARKWORTH FURNITURE1 Warkworth Furniture...Ch. 14 - CASE WARKWORTH FURNITURE1 Warkworth Furniture...
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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
- Leaky Pipe, a local retailer of plumbing supplies, faces demand for one of its SKUs at a constant rate of 30,000 units per year. It costs Leaky Pipe $10 to process an order to replenish stock and $1 per unit per year to carry the item in stock. Stock is received 4 working days after an order is placed. No backordering is allowed. Assume 300 working days a year.a. What is Leaky Pipe’s optimal order quantity?b. What is the optimal number of orders per year?c. What is the optimal interval (in working days) between orders?d. What is the demand during the lead time?e. What is the reorder point?f. What is the inventory position immediately after an order has been placed?arrow_forwardWhich of the following statements is FALSE of a fixed-quantity system (FQS)? Select one: a. In FQS, fixed quantity is ordered to bring the inventory position up to the replenishment level. b. In FQS with uncertain demand, the reorder point is chosen to include the demand during lead time, plus any safety stock. c. In FQS, inventory position is checked continuously, rather than at fixed intervals of time. d. In FQS, orders are placed when the inventory position reaches or drops below the reorder point. e. In FQS with uncertain demand, orders are placed with the same order quantity, but not necessarily with the same periodicity.arrow_forward. A newsvendor faces normally distributed demand and the critical ratio is .8. If theprofit-maximizing quantity is ordered, which of the following statements is true? a. Expected sales are less than expected demand.b. Expected sales are greater than expected demand.c. Expected sales are exactly equal to expected demand.d. Expected sales could be less than, equal to, or greater than expected demand.arrow_forward
- The basic EOQ model is based on all the following assumptions except: * A. Annual demand is known and constant.B. The item is always available when needed.C.Estimates of ordering and carrying costs are accurate.D.Order is instantaneously received exactly when previous inventory has just been used up.arrow_forwardSuppose the following item is being managed using a fixed-order quantity model with safety stock. Annual Demand = 100,000 units Order quantity = 30,000 units Safety stock = 4000 units What are the average inventory level and inventory turnover for this item?arrow_forwardConsider a product with a daily demand of 500 units, a setup cost per production run of $100, a daily holding cost per unit of $0.20, and an annual production rate of 219,000 units. The firm operates and experiences demand 365 days per year. Suppose that management mistakenly used the basic EOQ model to calculate the batch size instead of using the production order quantity model. How much money per year has that mistake cost the company?arrow_forward
- Please complete the sup part: e,f and g. 1.B&H needs to decide how to manage its inventory of cameras. The demand for cameras at B&H is 200 cameras per week. Each time that B&H places an order for a new shipment of cameras, it must pay $80 in fixed processing fees. A camera costs B&H $60 to purchase. The cost for B&H to hold a camera in its store for one week is $4. Assume that the lead time for the delivery of a camera is 0 weeks.a. Suppose that B&H places orders for cameras in quantities of 50 cameras at a time and places a new order for cameras each time that it runs out. Draw a graph showing the number of cameras that B&H has on-hand in inventory at each point in time up until the time when it places its fourth-order. Label the points in time at which B&H places a new order. Assume that B&H places its first order for 50 cameras on day 0.b. Suppose again that B&H places orders for 50 cameras at a time. What will be B&H’s average holding…arrow_forwardYou are asked to manage the purchases of potatoes (10 kgs per bag). The annual demand = 1200 bags, Deliveredpurchase cost = 30/bags, Annual carrying cost percentage= 10percent, Order cost = 50/order. The lead time is 5 working days. Assuming 24 working days per month. Question: Suppose orders are placed only at review time. Find the optimal period and the optimal orderquantity.arrow_forwardSuppose the newsvendor model is used to manage inventory. Which of the followingcan happen when the order quantity is increased by one unit? a. Expected sales increases by more than one unit.b. Expected leftover inventory increases by more than one unit.c. Expected sales decrease by less than one unit.d. Expected leftover inventory increases by less than one unit.arrow_forward
- The two most important inven tory-based questionsanswered by the typical inventory model are:a) when to place an order and the cost of the order.b) when to place an order and how much of an item to order.c) how much of an item to order and the cost of the order.d) how much of an item to order and with whom the order should be placed.arrow_forwardA distribution center (DC) in Wisconsin stocks Sony plasma TV sets. The center receives its inventory from a mega warehouse in Kansas with a lead time (L) of 5 days. The DC uses a reorder point (R) of 300 sets and afixed order quantity (Q) of 250 sets. The current on-hand inventory (OH) at the end of Day 1 is 400 sets, there are no scheduled receipts (SR), and there are no backorders (BO). Assume that all demands and receipts occur at the end of the day. The inventory position is compared to the reorder point after demands and receipts are accounted for. If necessary, an order is placed and the inventory position is updated. Given the demand schedule in the table below, determine when to order using a (Q) systemarrow_forwardA company has a demand for 25,750 units annually. The holding cost is 33% of the item cost which is $10.00. The ordering or set-up cost is $250.00 per order and the lead time is 5 days. Assume that there are 350 days per year Suppose a price break of $50 per order is offered for purchase quantities of 2,000 or greater. Question: What is the reorder point for this inventory strategy? What is the inventory position immediately after an order is placed for the inventory strategy that you have selected?arrow_forward
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