EBK PRODUCTION AND OPERATIONS ANALYSIS
7th Edition
ISBN: 9781478628385
Author: Olsen
Publisher: WAVELAND PRESS (ECONTENT)
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Chapter 4.8, Problem 27P
Summary Introduction
To determine:
Changes in order policy of vegetables.
Introduction:
Order policy is the instruction of order renewal or its exhaustion during a financial period. It is generally done when aggregate planning of demand is done.
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Product D is stocked only at the AMC Chemical Company's Dallas warehouse and at the
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Ingredient X
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Your firm uses a periodic review system for all SKUS classified, using ABC analysis, as B or C
items. Further, it uses a continuous review system for all SKUS classified as A items. The
demand for a specific SKU, currently classified as an A item, has been dropping. You have been
asked to evaluate the impact of moving the item from continuous review to periodic review.
Assume your firm operates 52 weeks per year; the item's current characteristics are:
Demand (D) = 15,080 units/year
Ordering cost (S) = $125.00/order
Holding cost (H) = $3.00/unit/year
Lead time (L) = 5 weeks
Cycle service level = 95 percent
Demand is normally distributed, with a standard deviation of weekly demand of 64 units.
-Calculate the item's EOQ.
- Use the EOQ to define the parameters of an appropriate continuous review and periodie
review system for this item.
-Which system requires more safety stock and by how much?
-How do you think each system can affect your procurement procedures/methods?
Your firm uses a periodic review system for all SKUS classified, using ABC analysis, as B or C
items. Further, it uses a continuous review system for all SKUS classified as A items. The
demand for a specific SKU, currently classified as an A item, has been dropping. You have been
asked to evaluate the impact of moving the item from continuous review to periodic review.
Assume your firm operates 52 weeks per year; the item's current characteristics are:
Demand (D) = 15,080 units/year
Ordering cost (S) = $125.00/order
Holding cost (H) = $3.00/unit/year
Lead time (L) = 5 weeks
Cycle service level = 95 percent
Demand is normally distributed, with a standard deviation of weekly demand of 64 units.
1- How do you think each system can affect your procurement procedures/methods?
Chapter 4 Solutions
EBK PRODUCTION AND OPERATIONS ANALYSIS
Ch. 4.4 - Prob. 1PCh. 4.4 - Prob. 2PCh. 4.4 - Prob. 3PCh. 4.4 - Prob. 4PCh. 4.4 - Prob. 5PCh. 4.4 - Prob. 6PCh. 4.4 - Prob. 7PCh. 4.4 - Prob. 8PCh. 4.4 - Prob. 9PCh. 4.5 - Prob. 10P
Ch. 4.5 - Prob. 11PCh. 4.5 - Prob. 12PCh. 4.5 - Prob. 13PCh. 4.5 - Prob. 14PCh. 4.5 - Prob. 15PCh. 4.5 - Prob. 16PCh. 4.6 - Prob. 17PCh. 4.6 - Prob. 18PCh. 4.6 - Prob. 19PCh. 4.6 - Prob. 20PCh. 4.7 - Prob. 21PCh. 4.7 - Prob. 22PCh. 4.7 - Prob. 23PCh. 4.7 - Prob. 24PCh. 4.7 - Prob. 25PCh. 4.8 - Prob. 26PCh. 4.8 - Prob. 27PCh. 4.8 - Prob. 28PCh. 4.9 - Prob. 29PCh. 4.9 - Prob. 30PCh. 4 - Prob. 31APCh. 4 - Prob. 32APCh. 4 - Prob. 33APCh. 4 - Prob. 34APCh. 4 - Prob. 35APCh. 4 - Prob. 36APCh. 4 - Prob. 37APCh. 4 - Prob. 38APCh. 4 - Prob. 39APCh. 4 - Prob. 40APCh. 4 - Prob. 41APCh. 4 - Prob. 42APCh. 4 - Prob. 43APCh. 4 - Prob. 44APCh. 4 - Prob. 45AP
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