= = +E vNo SpacingNormalAavReplaceHeading 1ReuseDictateEditorFilesParagraphStylesEditingReuse FilesVoiceEditorItem SKU A3378 has a demand that is normally distributed during the lead time, with amean of 360 units and standard deviation 9999 of 12. If Hinsdale cannot have stockoutsin more than 10% of the time in any order, how much safety stock should be maintainedand at what reorder point?1. SKU F5402: daily demand is normally distributed with a mean of 16, standarddeviation of 4, lead time is 4days, and must operate at a 95% service level.2. SKU B7319: daily demand is constant at 24 units per day, lead time is normally witha mean of 6 days and standard deviation of 2 days, and must operate at a 95% servicelevel.3. SKU F9004: daily demand is normally distributed with a mean of 21 units and astandard deviation of 3 days.The lead time is also normally distributed with a mean of 4 days, standard deviation of 2days, and a servicelevel of 90% is required.Text Predictions: On100% OO Fit Give Feed.acer#3396&57backspeуifCInmaltctri

ITEM SKUA3378 Average demand during lead time, μ=360 Standard deviation during lead time, σ =12…

Answered: Item SKU A3378 has a demand that is…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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b. Given the following information: Expected demund during lead time 300 units Standard devintion of lead time demand 30units Determine the following, assuming that lead time is constant and lead time demand is normally distributed: The ROP that will provide a stockout risk of 1% during lead time The safety stock needed to attain a 1% risk of stockout during lead time Would n stockout risk of 2% require more or less safety stock than a 1% risk? Explain. i. ii. iii. Based on III, would the ROP be larger, smaller or unaffected if the acceptable risk were 2% instead of 1%? Explain iv.
Furnco sells secretarial chairs. Annual demand isnormally distributed, with mean of 1,040 chairs and standarddeviation of 50.99 chairs. Furnco orders its chairs from itsflagship store. It costs $100 to place an order, and the leadtime is two weeks. Furnco estimates that each stockoutcauses a loss of $50 in future goodwill. Furnco pays $60 foreach chair and sells it for $100. The annual cost of holdinga chair in inventory is 30% of its purchase cost.a Assuming that all demand is backlogged, what arethe reorder point and the safety stock level? b Assuming that all stockouts result in lost sales, de-termine the optimal reorder point and the safety stock level.
Annual demand is 16000 units, cost per order is $75 and carrying cost per unit as a percentage is 10%. The company works 250 weeks a year; the lead-time on all orders placed is 6 working days. Assuming constant lead-time demand, and a unit cost of $45 what is the economic order quantity? What is the reorder point. If lead-time demand shows variability that follows a normal distribution with a mean μ =420 and a standard deviation σ =20, what will the revised reorder point if two stock-outs (shortages) are allowed? What is the company’s reorder point if the probability of a stock-out on any cycle is restricted to 0.05?
If a firm has an expected demand of 50 for its product but demand increases to 55 units 10% of the time, what would the expected cost of stock outs be if one unit costs R500 and the company held no safety inventory?
What is a normal distribution? What two characteristics define it? Why is it important in determining safety stock?
Given this information:Lead-time demand 600 poundsStandard deviation of lead time demand 52 pounds (Assume normality.)Acceptable stockout risk during lead time 4 percenta. What amount of safety stock is appropriate?b. When should this item be reordered?c. What risk of stockout would result from a decision not to have any safety stock?
6. Leaky Pipe, a local retailer of plumbing supplies, faces demand for one of its SKUs at a constant rate of 17,000 units per year. It costs Leaky Pipe $5 to process an order to replenish stock and $2.00 per unit per year to carry the item in stock. Stock is received 12 working days after an order is placed. No backordering is allowed. Assume 365 working days a year. d. The demand during lead time is _____ units. (Enter your response rounded to the nearest whole number.) e. The reorder point is ______ units. (Enter your response rounded to the nearest whole number.) f. The inventory position immediately after an order has been placed is _____ units. (Enter your response rounded to the nearest whole number.)
The injection molding department of a company uses an average of 30 gallons of special lubricanta day. The supply of the lubricant is replenished when the amount on hand is 170 gallons. It takesfour days for an order to be delivered. Safety stock is 50 gallons, which provides a stockout risk of9 percent. What amount of safety stock would provide a stockout risk of 3 percent? Assumenormality.
The Suregrip Tire Company carries a certain type of tire with the following characteristics:Average annual sales = 600 tiresOrdering cost = $40 per orderCarrying cost = 25 percent per yearItem cost = $50 per tireLead time = 4 daysStandard deviation of daily demand = 1 tirea. Calculate the EOQ.b. For a Q system of inventory control, calculate the safety stock required for service levels of 85, 90, 95, 97, and 99 percent. excelc. Construct a plot of total inventory investment versus service level.d. What service level would you establish on the basis of the graph in part c? Discuss.
Oretailer of white goods buys small appliances from a supplier. Their line includes rwo types of appliances for which the related data are as follows: Appliance type 2. Annual demand (units) 5235 4850 Ordering cost (TL) 125 125 Enit purchasing cost (TL) 35 25 The retailer has allocated a budget of 22,000 TL for thas procurement Assume that the aunual inventory carrying cost rate is 20 percent Caleulnte the unconstramed order quantities Are these values optimal? If not detemine the optimal quantities to be purchased from each appliance type (Hat. 0056)
A company stocks an SKU with a weekly demand of 600 units and a lead time of4 weeks. Management will tolerate one stockout per year. If sigma for the lead timeis 100 and the order quantity is 2500 units, what is the safety stock, the averageinventory, and the order point?
The appropriate level of safety stock is typically determined by:a) minimizing an expected stockout cost.b) choosing the level of safety stock that assures a givenservice level.c) carrying sufficient safety stock so as to eliminate allstockouts.d) annual demand.

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