OPERATION MANAGEMENT
2nd Edition
ISBN: 9781260242423
Author: CACHON
Publisher: MCG
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Textbook Question
Chapter 14, Problem 5PA
You are the owner of Hotspices.com, an online retailer of hip, exotic, and hard-to-find spices. Consider your inventory of saffron, a spice (generally) worth more by weight than gold. You order saffron from an overseas supplier with a shipping lead time of four weeks and you order weekly. Average weekly demand is
- a. Suppose it uses an order-up-to level of 301 ounces. What is its expected on-hand inventory? [LO14-2]
- b. Suppose it uses an order-up-to level of 250 ounces. What is its expected on-order inventory? [LO14-2]
- c. Suppose it uses an order-up-to level of 368 ounces. What is its in-stock probability? [LO14-2]
- d. Suppose it wants a .96 in-stock probability. What should its order-up-to level be? [LO14-3]
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Students have asked these similar questions
You are the owner of Hotspices.com, an online retailer of hip, exotic, and hard-to-find spices. Consider your inventory of saffron,
a spice (generally) worth more by weight than gold. You order saffron from an overseas supplier with a shipping lead time of four
weeks and you order weekly. Average weekly demand is normally distributed with a mean of 60 ounces and a standard
deviation of 20 ounces. What is its expected on-order inventory? (round up to the nearest integer)
Suppose the demand of a product in a retail store is 800 per year and it occurs at a constant
rate. Placement of an order of this product to an outside supplier by the store is 40 Dollar.
The super market authority has calculated the inventory holding cost per unit per year as
90 cents. Assuming no occurrence of shortages of the product, find
i. the minimal number of orders per year. Explain whether the nearest integer number of
orders per year is justified.
Please answer this part with the explanation part asked in the
question.
Answer the given question with a proper explanation and step-by-step solution.
An E-commerce firm has four regional fulfillment centers (warehouses). Weekly demand for an item (Product_A) at each warehouse is random and is normally distributed with a mean of 10,000 per week and a standard deviation of 2,000 units per week. Product_A’s unit cost is $10. The inventory holding cost of the company is 25% per year. Assume 50 weeks per year. Each replenishment order from the supplier of Product_A costs $1,000, which includes the costs associated with placing the order, transportation, receiving, inspection, and put-away labor expenses. The replenishment lead time from the supplier is 1 week. The company’s service level goal is 95% (probability of having sufficient inventory to meet demand).
On average, how long does a unit of inventory spend in the warehouse before being sold? Hint: Think Little's Law
2.5 weeks
6.6 weeks
5.3 weeks
1.3 weeks
Chapter 14 Solutions
OPERATION MANAGEMENT
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 - Prob. 4PACh. 14 - You are the owner of Hotspices.com, an online...Ch. 14 - Prob. 6PACh. 14 - Prob. 7PACh. 14 - Prob. 8PACh. 14 - Prob. 9PACh. 14 - Prob. 10PACh. 14 - Prob. 11PACh. 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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