Petromax Enterprises uses a continuous review inventory control system for one of its SKUs. The following information is available on the item. The firm operates 48 weeks in a year. Refer to the standard normal table for z-values. > Demand = 83,200 units/year > Ordering cost = $32.50/order > Holding cost = $2.50/unit/year > Average lead time = 4 weeks > Standard deviation of weekly demand = 200 units a. The economic order quantity for this item is units. (Enter your response rounded to the nearest whole number.) b. If Petromax wants to provide a 99% service level, the safety stock is units (enter your response rounded to the nearest whole number). units (enter your response rounded to the nearest whole number) and the reorder point is

Petromax Enterprises uses a continuous review inventory control system for one of its SKUs. The following information is available on the item. The firm operates 48 weeks in a year. Refer to the standard normal table for z-values. > Demand = 83,200 units/year > Ordering cost = $32.50/order > Holding cost = $2.50/unit/year > Average lead time = 4 weeks > Standard deviation of weekly demand = 200 units a. The economic order quantity for this item is units. (Enter your response rounded to the nearest whole number.) b. If Petromax wants to provide a 99% service level, the safety stock is units (enter your response rounded to the nearest whole number). units (enter your response rounded to the nearest whole number) and the reorder point is

Purchasing and Supply Chain Management

6th Edition

ISBN:9781285869681

Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Chapter16: Lean Supply Chain Management

Section: Chapter Questions

Problem 10DQ: The chapter presented various approaches for the control of inventory investment. Discuss three...

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You are the operations manager of a firm that uses the continuous review (EOQ) system to control your inventory. Suppose the firm operates 52 weeks per year, 365 days, and has the following characteristics for its primary item: Demand = 25,000 units/year %3D Ordering Cost = $30/order Holding Cost = $8/unit/year Lead Time = 2 weeks Standard Deviation in weekly demand = 100 units %3D What is the economic order quantity for this item? Between 400 and 450 units O Between 450 and 500 units Fewer than 400 units O Greater than 500 units
Petromax Empreendimentos uses a system of continuous inventory review control for a of your items. The following information is available about the product. The company operates 50 weeks per annum. Demand = 50 thousand units / year Order cost = $ 35 / order Storage cost = two dollars / unit / year Average lead time = three weeks Standard deviation of weekly demand = 125 units
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Use the information below for the following questions: Knights Corporation also needs to determine the proper reorder point and safety stock level. Annual Demand = 15000 gallons Lead Time = 15 days Standard deviation of lead time = 3 days Standard deviation of demand = 10 gallons Service Level = 96% (Z score of 1.75 or 1.76) Open days per year = 360 days 1. What is the reorder point? (keep two decimal places through your work, round your final answer up to the next highest whole number) 2.What is the safety stock? (keep two decimal places through your work, round your final answer up to the next highest whole number) 3. If the service level increased to 99% (Z score of 2.32 or 2.33), what would be the new safety stock? (keep two decimal places through your work, round your final answer up to the next highest whole number)
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