Operations Management
2nd Edition
ISBN: 9781260484687
Author: CACHON, Gerard
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Question
Chapter 14, Problem 6PA
a)
Summary Introduction
To determine: The expected on-hand inventory.
b)
Summary Introduction
To determine: The expected on-order inventory.
c)
Summary Introduction
To determine: The in-stock probability.
d)
Summary Introduction
To determine: The order-up-to level.
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Daily demand for fresh cauliflower in the ZZ-Warehouse store follows normal distribution with mean 100 cartons and s.d. 20 cartons.
The ZZ-Warehouse buys at a cost of $50.00 per carton, sells it for $70.00 per carton.
Unsold cartons are sold for $20.00 per carton.
Cost of shortage = 70-50 = 20; cost of excess = 50-20 = 30;
Ratio using (20.1), the service level = (20/(20+30))= 0.4
What is the optimal order quantity, using the single period – continuous demand model?
a. 105
b. 95
c. 110
d. 100
e. 80
A store has collected the following information on one of its products:Demand = 4,500 units/year Standard deviation of weekly demand = 12 units Ordering costs = $40/order Holding costs = $3/unit/year Cycle-service level = 90% (z for 90% = 1.28) Lead-time = 2 weeks Number of weeks per year = 52 weeks a.
If a firm uses the continuous review system to control the inventory, what would be the order quantity and reorder point?
ACold Inc is a frozen food distributor with 10 warehouses across the country. Ivan Tory, one of the warehouse
managers, wants to make sure that the inventory policies used by the warehouse are minimizing inventory
while still maintaining quick delivery to ACold's customers. Since the warehouse carries hundreds of different
products, Ivan decided to study one. He picked Caruso's Frozen Pizza (CFP). Average daily demand for CFPs
is normally distributed with a mean of 384 and a standard deviation of 158. Since ACold orders at least one
truck from their supplier each day, ACold can essentially order any quantity of CFP it wants each day. In fact,
ACold's computer system is designed to implement an order-up-to policy for each product. Ivan notes that any
order for CFPs arrives 5 days after the order.
a.
Suppose an order-up-to level of 2472 is used. What is the expected on-hand inventory?
Use Table 14.1 and round to nearest integer.
b. Suppose an order-up-to level of 2404 is used. What is…
Chapter 14 Solutions
Operations 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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