A logistics company applies the EOQ model to manage its inventory of spare parts used for maintenance work for their trucks. Daily demand is normally distributed. The average daily demand is 10 units, with a standard deviation of 5 units. The EOQ is found to be 400 units and used as the order size for all orders. Order lead time is 4 days. Currently, the firm has just received an order. In how many days do they need to place the next order? 4 days 36 days 40 days None of the above. Demand is random, so the time until they reach the ROP again is also random
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- Among the following multi-period inventory models, which one has the highest probability of stockout? A. Fixed Order Quantity with Safety Stock B. Fixed Time Period Model C. Fixed Order Quantity D. Both Fixed Order Quantity & Fixed Order Quantity with Safety StockA logistics company applies the EOQ model to manage its inventory of spare parts used for maintenance work for their trucks. Daily demand is normally distributed. The average daily demand is 10 units, with a standard deviation of 5 units. The EOQ is found to be 400 units and used as the order size for all orders. Order lead time is 4 days. Currently, the firm has just received an order. In how many days do they need to place the next order?A store uses an EOQ system for one of its most popular product. The product has a daily demand of 49 units. The store purchases the product from a supplier. The supplier has an order lead time of 6 days. The store uses an order quantity of 1617 units. A shipment of the supplier always at the beginning of day and the store always place a new order at the end of day. The store also monitors its inventory continuously. Assume that a shipment arrives at the beginning of day 1 and the beginning inventory becomes 1617 units. What is the inventory level at the end of day 12?
- Wholemark is an Internet order business that sells one popular New Year's greeting card. The cost of the paper on which the card is printed is $0.10 per card, and the cost of printing is $0.42 per card. The company receives $2.40 per card sold. Since the cards have the current year printed on them, unsold cards have no salvage value. Based on past data, the number of customers from Los Angeles is normally distributed with a mean of 2,500 and a standard deviation of 600. What is the optimal production quantity for the card for Los Angeles, if Wholemark only makes a one-time production for this area? Round to the nearest integer.Catlea Merchandising is engaged in selling school shoesfor both boys and girls in their teenage years. Catlea needs 32,000 pairs of shoes in a year in order to satisfy the market demand. It costs ₱ 48 to place an order while ₱ 8 is needed to hold each quantity of shoe in Catlea's inventory. Upon checking on Catlea's supplier, it takes 8 days in between placing an order and eventually receiving it. a. Determine the Economic Order Quantityb. Determine the number of order per monthc. Determine the reorder pointYour 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?United Airlines has an agreement to buy jet fuel from Exxon. The goal is to minimize total cost (i.e., ordering cost + holding cost). The annual demand for fuel is 201,000 barrels. Exxon charges United $3740 to process each order. United incurs a holding cost of $20 per barrel. When purchasing using the EOQ (from last question), what is the order cycle time (days between orders) for United? Note: round your answer to the nearest 1 decimal place. For example, answer like 12.3 Answer: CheckWholemark is an Internet order business that sells one popular New Year greeting card once a year. The cost of the paper on which the card is printed is $0.05 per card, and the cost of printing is $0.15 per card. The company receives $2.15 per card sold. Since the cards have the current year printed on them, unsold cards have no salvage value. Their customers are from the four areas: Los Angeles, Santa Monica, Hollywood, and Pasadena. Based on past data, the number of customers from each of the four regions is normally distributed with mean 2,000 and standard deviation 500. (Assume these four are independent.)
- ABC Company placed an order on December 1. It normally receives the order after 9 days. If the company has a normal usage of 10 units per day. What is the re-order point?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 1D2 = 15,080 units/yearOrdering cost 1S2 = $125.00/orderHolding cost 1H2 = $3.00/unit/yearLead time 1L2 = 5 weeksCycle@service level = 95 percentDemand is normally distributed, with a standard deviation of weekly demand of 64 units.a. Calculate the item’s EOQ.b. Use the EOQ to define the parameters of an appropriate continuous review and periodic review system for this item.c. Which system requires more safety stock and by how much?Wholemark is an Internet order business that sells one popular New Year greeting card once a year. The cost of the paper on which the card is printed is $0.05 per card, and the cost of printing is $0.15 per card. The company receives $2.15 per card sold. Since the cards have the current year printed on them, unsold cards have no salvage value. Its customers are from the four areas: Los Angeles, Santa Monica, Hollywood, and Pasadena. Based on past data, the number of customers from each of the four regions is normally distributed with mean 2,000 and standard deviation 500. (Assume these four are independent.) What is the optimal production quantity for the card?