A warehouse manager at Mary Beth Marrs Corp. needs to simulate the demand placed on a product that does not fitstandard models. The concept being measured is "demand during lead time," where both lead time and daily demand arevariable. The historical record for this product, along with the cumulative distribution, appear in the table.Demand DuringLead TimeCumulaiveProbabilityProbability1200.010.011400.120.131600.350.481800.200.682000.040.722200.080.802400.201.00The following random numbers have been generated: 9, 78, 40, 41, and 99. (Note: Assume the random number intervalbegins at 01 and ends at 00.)Based on the given probabilty distribution, for the given random number the demand during the lead time is:Random Number978404199DemandThe average demand during the lead time is(enter your response as an integer).The total demand during the lead time based on the five simulations is (enter your response as an integer).

Simulation is a process that is concerned with imitating the parameters of real-life systems and…

Answered: A warehouse manager at Mary Beth Marrs…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 40P

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In Problem 12 of the previous section, suppose that the demand for cars is normally distributed with mean 100 and standard deviation 15. Use @RISK to determine the best order quantityin this case, the one with the largest mean profit. Using the statistics and/or graphs from @RISK, discuss whether this order quantity would be considered best by the car dealer. (The point is that a decision maker can use more than just mean profit in making a decision.)
Suppose that the manager of a construction supply house determined from historical recordsthat demand for sand during lead time averages 50 tons. In addition, suppose the managerdetermined that demand during lead time could be described by a normal distribution thathas a mean of 50 tons and a standard deviation of 5 tons. Answer these questions, assumingthat the manager is willing to accept a stockout risk of no more than 3 percent:a. What value of z is appropriate?
A retailer uses a periodic review order-up-to model to control the inventory of one of its high volume products. Average demand is 2580 units per week with a standard deviation of 1270. The review period is 5 weeks, the lead time is 11 weeks, and the safety factor used is 0.61. How many stockouts should the retailer expect for this product next year?
An automotive warehouse stocks a variety of parts that are sold at neighborhoodstores. One particular part, a popular brand of oil filter, is purchased by thewarehouse for $1.50 each. It is estimated that the cost of order processing andreceipt is $100 per order. The company uses an inventory carrying charge based on warehouse for $1.50 each. It is estimated that the cost of order processing andreceipt is $100 per order. The company uses an inventory carrying charge based ona 28 percent annual interest rate.The monthly demand for the filter follows a normal distribution with mean280 and standard deviation 77. Order lead time is assumed to be five months.Assume that if a filter is demanded when the warehouse is out of stock, then thedemand is back-ordered, and the cost assessed for each back-ordered demand is$12.80. Determine the following quantities:a. The optimal values of the order quantity and the reorder level.b. The average annual cost of holding, setup, and stock-out associated…
The home appliance department in a large department store is using a (Q, R) system to control the replenishment of a model of FM radio. The store sells an average of 12 radios each week. Weekly demand follows a normal distribution with variance 30. (Assume that there are 52 weeks in a year.) The store pays $20 for each radio, which it sells for $85. Fixed order cost is $30 per order. The accounting department recommends a 20% interest rate for the cost of capital. Storage costs are 3% and breakage 2% of the purchasing cost of each item. If a customer demands the radio when it is out of stock, the customer will generally go elsewhere. Loss-of-goodwill costs are estimated to be about $25 per radio. Order lead time is 13 weeks. (The penalty cost includes loss of profit and loss of goodwill.) Find the optimal values of (Q, R) based on the penalty cost. What are the values for Q and R if the stock-out cost is replaced with a 95% Type 1 service level?
Annual demand for number 2 pencils at the campus store is normallydistributed with mean 1,000 and standard deviation 250. The store purchases the pencils for 6 cents each and sells them for 20 cents each. There is a two-month lead time from the initiation to the receipt of an order. The store accountant estimates that the cost in employee time for performing the necessary paperwork to initiate and receive an order is $20, and recommends a 22 percent annual interest rate for determining holding cost. The cost of a stock-out is the cost of lost profit plus an additional 20 cents per pencil, which represents the cost of loss of goodwill.a. Find the optimal value of the reorder point R assuming that the lot size used is the EOQ.b. Find the simultaneous optimal values of Q and R.c. Compare the average annual holding, setup, and stock-out costs of the policies determined in parts (a) and (b).d. What is the safety stock for this item at the optimal solution?
A retail outlet sells a seasonal product for $10 per unit. The cost of the product is $8 per unit. All units not sold during the regular season are sold for half the retail price in an end-of-season clearance sale. Assume that demand for the product is uniformly distributed between 200 and 800. What is the recommended order quantity? What is the probability that at least some customers will ask to purchase the product after the outlet is sold out? That is, what is the probability of a stock-out using your order quantity in part (a)? To keep customers happy and returning to the store later, the owner feels that stock-outs should be avoided if at all possible. What is your recommended order quantity if the owner is willing to tolerate a 0.15 probability of a stock-out?
Please do not give solution in image format thanku Deltic sells this component for 55 per unit with a 4-month delivery lead time. Assume Deltic covers all transportation and related processing until delivery. TCX’s demand forecast for the upcoming selling season (12 months) is a normal distribution with mean 13500 and standard deviation 3736,4 . TCX sells each unit, after integrating their proprietary software, for 135. Assume that TCX uses a holding cost rate of 25 %, and any leftover units can be sold for 30 on average. Due to the long lead time and high minimum order quantity required, TCX is planning on a single order from Deltic to meet their needs in the next year. How many of these components should TCX order? Calculate the resulting expected annual profits for TCX.
A tire store orders its stock for a popular winter tire once every year. The cost of a tire for the store is $120. The store sells a tire for $140 at the regular price. The regular demand per year is 1,000 tires, which is normally distributed with a standard deviation of 70 tires. Customers do not prefer to buy from an older stock; hence the store does not keep the tires for the next year. The store is able to sell the excess stock at a reduced price of $80 per tire. How many tires the store should order each year?
The home appliance department of a large department store is using a lot size–reorder point system to control the replenishment of a particular model of FM table radio. The store sells an average of 10 radios each week. Weekly demand follows a normal distribution with variance 26.The store pays $20 for each radio, which it sells for $75. Fixed costs of replenishment amount to $28.The accounting department recommends a 20 percent interest rate for the cost of capital. Storage costs amount to 3 percent and breakage to 2 percent of the value of each item.If a customer demands the radio when it is out of stock, the customer will generally go elsewhere. Loss-of-goodwill costs are estimated to be about $25 per radio. Replenishment lead time is three months.a. If lot sizes are based on the EOQ formula, what reorder level should be used for the radios?b. Find the optimal values of (Q, R).c. Compare the average annual costs of holding, ordering, and stock-out for the policies that you found in…
I need a detailed explanation on how to solve this problem: A bagel shop buys each bagel for $0.08 and sells each bagel for $0.35. Leftover bagels at the end of the day are purchased by a local soup kitchen for $0.03 per bagel. The shop’s owner has observed for the daily demand, Q, the following probabilities, f(Q): Q 0 5 10 15 20 25 30 35 f(Q) 0.05 0.10 0.10 0.20 0.25 0.15 0.10 0.05 - What is the optimal daily order in multiples of 5 (include the model name and formula)? - If the daily demand is normally distributed (the mean and variance can be obtained from the table above), then what is the optimal daily order?
Annual demand for number 2 pencils at the campus store is normally distributed with mean 1,000 and standard deviation 250. The store purchases the pencils for 6 cents each and sells them for 20 cents each. There is a two-month lead time from the initiation to the receipt of an order. The store accountant estimates that the cost in employee time for performing the necessary paperwork to initiate and receive an order is $20, and recommends a 22 percent annual interest rate for determining holding cost. The cost of a stock-out is the cost of lost profit plus an additional 20 cents per pencil, which represents the cost of loss of goodwill. Consider the problem of satisfying the demand for number 2 pencils faced by the campus store mentioned above.a. Re-solve the problem, substituting a Type 1 service level criterion of 95 percent for the stock-out cost.b. Re-solve the problem, substituting a Type 2 service level criterion of 95 percent for the stock-out cost. Assume that Q is given by the…

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