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Concept explainers
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.
- What is Leaky Pipe’s optimal order quantity?
- What is the optimal number of orders per year?
- What is the optimal interval (in working days) between orders?
- What is the demand during the lead time?
- What is the reorder point?
- What is the inventory position immediately after an order has been placed?
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Chapter 9 Solutions
Operations Management: Processes and Supply Chains, Student Value Edition Plus MyLab Operations Management with Pearson eText -- Access Card Package (11th Edition)
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