OPERATIONS MANAGEMENT LL PACKAGE
11th Edition
ISBN: 9781323592632
Author: KRAJEWSKI
Publisher: Pearson Custom Publishing
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Question
Chapter C, Problem 11P
A
Summary Introduction
Interpretation:Order size of vaccine for the maximization of profits is to be calculated.
Concept Introduction: Lot size is necessary for ordering as profit maximization is the order size and expected payoff is the amount received from a project in all respects.
B
Summary Introduction
Interpretation: The eligibility (profit maximization) of the clinic for accepting federal program if cost reduced to $ 2,charging not more than $ 10per vaccine
Concept Introduction: Lot size is necessary for ordering as profit maximization is the order size and expected payoff is the amount received from a project in all respects.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
A health and nutrition store stocks a multivitamin with an annual demand of 1,000 bottles has
Co = $24.50 and Ch = $7.The demand exhibits some variability such that the lead-time demand follows a normal probability distribution with ? = 25 and ? = 5.
(a)What is the recommended order quantity? (Round your answer to the nearest integer.)
(b)What are the reorder point and safety stock if the store desires at most a 4% probability of stock-out on any given order cycle? (Round your answers to the nearest integer.)
reorder pointsafety stock
(c)If a manager sets the reorder point at 30, what is the probability of a stock-out on any given order cycle? (Round your answer to four decimal places.)
How many times would you expect a stock-out during the year if this reorder point were used? (Round your answer to the nearest integer.)
A health and nutrition store stocks a multivitamin with an annual demand of 1,000 bottles has
Co = $26.50 and Ch = $7. The demand exhibits some variability such that the lead-time demand follows a normal probability distribution with ? = 25 and ? = 5.
(a)
What is the recommended order quantity? (Round your answer to the nearest integer.):________
(b)
What are the reorder point and safety stock if the store desires at most a 6% probability of stock-out on any given order cycle? (Round your answers to the nearest integer.)
reorder point:________
safety stock:________
(c)
If a manager sets the reorder point at 30, what is the probability of a stock-out on any given order cycle? (Round your answer to four decimal places.):________
How many times would you expect a stock-out during the year if this reorder point were used? (Round your answer to the nearest integer.):________
A retailer carries 10,000 items in its store. During the week, there is some demand for 6000 of the items. Among those, there are 100 products for which all of the demand was not satisfied and 400 products for which only some of demand was satisfied. a. What is their in-stock probability for this week?b. What is their stockout probability for this week?
Chapter C Solutions
OPERATIONS MANAGEMENT LL PACKAGE
Knowledge Booster
Learn more about
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
- Dan McClure owns a thriving independent bookstore in artsy New Hope, Pennsylvania. He must decide how many copies to order of a new book, Power and Self-Destruction, an exposé on a famous politician’s lurid affairs. Interest in the book will be intense at first and then fizzle quickly as attention turns to other celebrities. The book’s retail price is $20, and the wholesale price is $12. The publisher will buy back the retailer’s leftover copies at a full refund, but McClure Books incurs $4 in shipping and handling costs for each book returned to the publisher. Dan believes his demand forecast can be represented by a normal distribution with a mean of 200 and a standard deviation of 80. Round your answer to 2 digits after the decimal point if it is not an integer. Do NOT use comma in your numeric answers. Dan will consider this book to be a blockbuster for him if it sells more than 400 units. The probability that Power and Self-Destruction will be a blockbuster is [xa]% (use the…arrow_forwardA supermarket in Seattle must decide how many wedding cakes to prepare for the upcomingweekend. Cakes cost $33 each to make, and they sell for $60 each. At the very last hour of theday, any unsold boxes are reduced to “half-price”. Holding cost is negligible. Analysis of recentdemand resulted in the following table: Demand Probability 0 .15 1 .35 2 .30 3 .20 How many cakes should be prepared to maximize expected profit?arrow_forwardA Mercedes dealer pays $40,000 for each car purchased (wholesale price). The annual holding cost is estimated to be 30% of the dollar value of inventory. The dealer sells an average of 1200 cars per year. They believe that demand is backlogged but estimate that if they are short one car for one year, the loss in future profits is about 10% of the wholesale price. Each time the dealer places an order for cars, ordering costs amount to $1600. Assume there are 360 work days per year. Question: If the Mercedes dealer wants to limit backorders so that they occur 20% of the time, what is the maximum number of backorders that should be allowed (assuming the optimal order quantity doesn't change)?arrow_forward
- Forrest and Dan make boxes of chocolates for which the demand is uncertain. Forrest says, “That’s life.” On the other hand, Dan believes that some demand patterns exist that could be useful for planning the purchase of sugar, chocolate, and shrimp. Forrest insists on placing a surprise chocolatecovered shrimp in some boxes so that “You never know what you’ll get.” Quarterly demand (in boxes of chocolates) for the last 3 years follows: Quarter Year 1 Year 2 Year 3 1 2 3 4 3,000 1,700 900 4,400 3,300 2,100 1,500 5,100 3,502 2,448 1,768 5,882 Total 10,000 12,000 13,600 a. Use intuition and judgment to estimate quarterly demand for the fourth year.b. If the expected sales for chocolates are 14,800 cases for year 4, use the multiplicative seasonal method to prepare a forecast for each quarter of the year. Are any of the quarterly forecasts different from what you thought you would get in part (a)?arrow_forwardPlease do not give solution in image formate thanku. A health and nutrition store stocks a multivitamin with an annual demand of 1,000 bottles has Co = $24.50 and Ch = $9. The demand exhibits some variability such that the lead-time demand follows a normal probability distribution with ? = 25 and ? = 5. What is the recommended order quantity? (Round your answer to the nearest integer.) What are the reorder point and safety stock if the store desires at most a 6% probability of stock-out on any given order cycle? (Round your answers to the nearest integer.) reorder point ? safety stock? If a manager sets the reorder point at 30, what is the probability of a stock-out on any given order cycle? (Round your answer to four decimal places.) How many times would you expect a stock-out during the year if this reorder point were used? (Round your answer to the nearest integer.)arrow_forwardHoward BooksLynelle Howard owns a thriving independent bookstore in artsy New Hope,Pennsylvania. She must decide how many copies to order of a new book, Powerand Self-Destruction, an exposé on a famous politician’s lurid affairs. Interest inthe book will be intense at first and then fizzle quickly as attention turns to othercelebrities.The book’s retail price is $27 and the wholesale price is $19. The publisher willbuy back the retailer’s leftover copies at a full refund, but Howard Books incurs $5in shipping and handling costs for each book returned to the publisher.Lynelle believes her demand forecast can be represented by a normal distributionwith a mean of 310 and a standard deviation of 100.arrow_forward
- A manufacturer of small garden tools has introduced a new product, a battery powered shrub/hedge trimmer. The anticipated demand is normally distributed with a mean of μ = 100 and a standard deviation of σ = 50. Each unit costs $75 to manufacture and the introductory price is to be $125. Any unsold units at the end of the season are unlikely to be very valuable and will be disposed of in a fire sale for $25 each. It costs $10 to hold a unit in inventory for the entire season. What is the cost of overstocking? What is the cost of understocking? What is the optimal cycle service level? How many units should be manufactured for sale?arrow_forwardA Mercedes dealer purchases vehicles for $20,000. The annual holding cost is estimated to be 25% of the dollar value of inventory. The dealer sells an average of 500 cars per year. He believes that demand is backlogged, but estimates that if he is short one car for one year, he will lose $20,000 in future profits. Each time the dealer places an order for cars, the ordering cost amounts to $10,000. What is the (s, Q) ordering policy that results in a 90% CSL?arrow_forwardA warehouse checks inventory and places an order from a supplier for a particular product once a month. The monthly demand for the product is independent and normally distributed with a mean of 500 and a standard deviation of 100. If the warehouse targets a 90% service level for this product, and the supplier’s lead time is one month, how much safety stock should be held? PLEASE SHOW CALCULATIONS/EXCEL WITH FORMULASarrow_forward
- The local supermarket buys lettuce each day to ensure really fresh produce. Each morning any lettuce that is left from the previous day is sold to a dealer that resells it to farmers who use it to feed their animals. This week the supermarket can buy fresh lettuce for $11.00 a box. The lettuce is sold for $25.00 a box and the dealer that sells old lettuce is willing to pay $3.00 a box. Past history says that tomorrow's demand for lettuce averages 265 boxes with a standard deviation of 42 boxes. How many boxes of lettuce should the supermarket purchase tomorrow? (Use Excel's NORMSINV() function to find the Z-score. Round intermediate calculations to four decimal places. Round your answer to the nearest whole number.) Number of boxes ( ? )arrow_forwardThe Farmer’s Wife is a country store specializing in knickknacks suitable for a farm-house décor. One item experiencing a considerable buying frenzy is a miniature Holstein cow. Average weekly demand is 30 cows, with a standard deviation of 5 cows. The cost to place a replenishment order is $15 and the holding cost is $0.75/cow/year. The supplier, however, is inChina. The lead time for new orders is 8 weeks, with a standard deviation of 2 weeks. The Farmer’s Wife, which is open only 50 weeks a year, wants to develop a continuous review inventory system for this item with a cycle-service level of 90 percent.a. Specify the continuous review system for the cows. Explain how it would work in practice.b. What is the total annual cost for the system you developed?arrow_forwardA Mercedes dealer pays $40,000 for each car purchased (wholesale price). The annual holding cost is estimated to be 30% of the dollar value of inventory. The dealer sells an average of 1200 cars per year. They believe that demand is backlogged but estimate that if they are short one car for one year, the loss in future profits is about 10% of the wholesale price. Each time the dealer places an order for cars, ordering costs amount to $1600. Assume there are 360 work days per year. Question: What percent of the time do shortages occur? I've deduced the percent of shortage time to be 25%, but am not sure I've set up my formulas correctly.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Practical Management ScienceOperations ManagementISBN:9781337406659Author:WINSTON, Wayne L.Publisher:Cengage,
Operations ManagementOperations ManagementISBN:9781259667473Author:William J StevensonPublisher:McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi...Operations ManagementISBN:9781259666100Author:F. Robert Jacobs, Richard B ChasePublisher:McGraw-Hill Education
Purchasing and Supply Chain ManagementOperations ManagementISBN:9781285869681Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. PattersonPublisher:Cengage Learning
Production and Operations Analysis, Seventh Editi...Operations ManagementISBN:9781478623069Author:Steven Nahmias, Tava Lennon OlsenPublisher:Waveland Press, Inc.
Practical Management Science
Operations Management
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:Cengage,
Operations Management
Operations Management
ISBN:9781259667473
Author:William J Stevenson
Publisher:McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi...
Operations Management
ISBN:9781259666100
Author:F. Robert Jacobs, Richard B Chase
Publisher:McGraw-Hill Education
Purchasing and Supply Chain Management
Operations Management
ISBN:9781285869681
Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:Cengage Learning
Production and Operations Analysis, Seventh Editi...
Operations Management
ISBN:9781478623069
Author:Steven Nahmias, Tava Lennon Olsen
Publisher:Waveland Press, Inc.
Inventory Management | Concepts, Examples and Solved Problems; Author: Dr. Bharatendra Rai;https://www.youtube.com/watch?v=2n9NLZTIlz8;License: Standard YouTube License, CC-BY