VITRAN Bus Services purchases diesel fuel from Domino Gas Supply. In addition to fuel cost, Domino Gas Supply charges VITRAN Bus Services $250 per order to cover the expenses of delivering and transferring the fuel to VITRAN Bus Services storage tanks. The lead time for new shipment from Domino Gas Supply is 10 days, the cost of holding a gallon of fuel in the storage tanks is $0.04 per month, or $0.48 per year and the annual usage of fuel is 150,000 gallons. VITRAN Bus Services buses operate 300 days a year. What is the optimal order quantity for VITRAN Bus Services? How frequently should VITRAN Bus Services order to replenish the gasoline supply?
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VITRAN Bus Services purchases diesel fuel from Domino Gas Supply. In addition to fuel cost, Domino Gas Supply charges VITRAN Bus Services $250 per order to cover the expenses of delivering and transferring the fuel to VITRAN Bus Services storage tanks. The lead time for new shipment from Domino Gas Supply is 10 days, the cost of holding a gallon of fuel in the storage tanks is $0.04 per month, or $0.48 per year and the annual usage of fuel is 150,000 gallons. VITRAN Bus Services buses operate 300 days a year.
- What is the optimal order quantity for VITRAN Bus Services?
- How frequently should VITRAN Bus Services order to replenish the gasoline supply?
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- Ruby-Star Incorporated is considering two different vendors for one of its top-selling products which has an average weekly demand of 60 units and is valued at $60 per unit. Inbound shipments from vendor 1 will average 370 units with an average lead time (including ordering delays and transit time) of 5 weeks. Inbound shipments from vendor 2 will average 520 units with an average lead time of 1 week. Ruby-Star operates 52 weeks per year; it carries a 5-week supply of inventory as safety stock and no anticipation inventory. a. What would be the average aggregate inventory value of this product if Ruby-Star used vendor 1 exclusively?b. What would be the average aggregate inventory value of this product if Ruby-Star used vendor 2 exclusively?c. How would your analysis change if average weekly demand increased to 100 units per week?K Ruby-Star Incorporated is considering two different vendors for one of its top-selling products which has an average weekly demand of 30 units and is valued at $100 per unit. Inbound shipments from vendor 1 will average 300 units with an average lead time (including ordering delays and transit time) of 4 weeks. Inbound shipments from vendor 2 will average 490 units with an average lead time of 1 week. Ruby-Star operates 52 weeks per year; it carries a 4-week supply of inventory as safety stock and no anticipation inventory. a. The average aggregate inventory value of the product if Ruby-Star used vendor 1 exclusively is $39,000. (Enter your response as a whole number.) b. The average aggregate inventory value of the product if Ruby-Star used vendor 2 exclusively is $ 39,500. (Enter your response as a whole number.) c. How would your analysis change if average weekly demand increased to 60 units per week? The average aggregate inventory value of the product if Ruby-Star used vendor 1…Ruby-Star Incorporated is considering two different vendors for one of its top-selling products which has an average weekly demand of 50 units and is valued at $75 per unit. Inbound shipments from vendor 1 will average 350 units with an average lead time (including ordering delays and transit time) of 2 weeks. Inbound shipments from vendor 2 will average 500 units with an average lead time of 1 week. Ruby-Star operates 52 weeks per year; it carries a 2-week supply of inventory as safety stock and no anticipation inventory.a. What would be the average aggregate inventory value of this product if Ruby-Star used vendor 1 exclusively?b. What would be the average aggregate inventory value of this product if Ruby-Star used vendor 2 exclusively?c. How would your analysis change if average weekly demand increased to 100 units per week?
- Suppose the Motorboat dealership in part (a) above dealing in costly motorboats follows the policy of carrying a few units in stock and ordering for replenishment as soon as a motorboat is sold from the stock. The unit cost of the motorboat is $60,000 and the holding or carrying cost is $5,000 per unit per year. The management of Motorboat dealership believe that the shortage cost due to waiting for the motorboat is $2,000 per unit short per month. The demand is seen to be Poisson distributed with an average rate of 2 units per month and the replenishment lead time can be considered to be exponential with a mean of one month. Considering the system as an M/M/s queuing system, find the optimal stock to be carried which can minimize the sum total of carrying and shortage costs.Ruby-Star Incorporated is considering two different vendors for one of its top-selling products which has an average weekly demand of 30 units and is valued at $100 per unit. Inbound shipments from vendor 1 will average 300 units with an average lead time (including ordering delays and transit time) of 4 weeks. Inbound shipments from vendor 2 will average 490 units with an average lead time of 1 week. Ruby-Star operates 52 weeks per year; it carries a 4-week supply of inventory as safety stock and no anticipation inventory. a. The average aggregate inventory value of the product if Ruby-Star used vendor 1 exclusively is $39,000. (Enter your response as a whole number.) b. The average aggregate inventory value of the product if Ruby-Star used vendor 2 exclusively is $ (Enter your response as a whole number.)Ruby-Star Incorporated is considering two different vendors for one of its top-selling products which has an average weekly demand of 30 units and is valued at $60 per unit. Inbound shipments from vendor 1 will average 330 units with an average lead time (including ordering delays and transit time) of 4 weeks. Inbound shipments from vendor 2 will average 450 units with an average lead time of 3 weeks. Ruby-Star operates 52 weeks per year; it carries a 4-week supply of inventory as safety stock and no anticipation inventory. A. the average aggregate inventory value of the product if ruby star used vendor 1 exclusively is $_____ (enter your response as a whole number) B. the average aggregate inventory value of the product if ruby sta used vendor 2 exclusively is $______ (enter your response as a whole number) C. how would your analysis change if average weekly demand increased to 140 units per week? the average aggregate inventory value of the product if ruby star used vendor 1…
- Copper Kettle Catering (CKC) is a full-service catering company that provides services ranging from box lunches for picnics or luncheon meetings to large wedding, dinner, or office parties. Established as a lunch delivery service for offices in 1972 by Wayne and Janet Williams, CKC has grown to be one of the largest catering businesses in Raleigh, North Carolina. The Williams’s divide customer demand into two categories: deliver only and deliver and serve. The deliver-only side of the business delivers boxed meals consisting of a sandwich, salad, dessert, and fruit. The menu for this service is limited to six sandwich selections, three salads or potato chips, and a brownie or fruit bar. Grapes and an orange slice are included with every meal, and iced tea can be ordered to accompany the meals. The overall level of demand for this service throughout the year is fairly constant, although the mix of menu items delivered varies. The planning horizon for this segment of the business is…Suppose a Motorboat dealership is dealing in costly motorboats that follow the policy of carrying a few units in stock and ordering for replenishment as soon as a motorboat is sold from the stock. The unit cost of the motorboat is $60,000 and the holding or carrying cost is $5,000 per unit per year. The management of the Motorboat dealership believes that the shortage cost due to waiting for the motorboat is $2,000 per unit short per month. The demand is seen to be Poison distributed with an average rate of 2 units per month and the replenishment lead time can be considered to be exponential with a mean of one month Considering the system as an M/M/s queuing system, find the optimal stock to be carried which can minimize the sum total of carrying and shortage costs.The University Bookstore at Tech stocks the required textbook for Management Science 2405. The demand for this text is 1,200 copies per year. The cost of placing an order is $350, and the annual carrying cost is $2.75 per book. If a student requests the book and it is not in stock, the student will likely go to the privately owned Tech Bookstore. It is likely that the student will not buy books at the University Bookstore in the future; thus the shortage cost to the University Bookstore is estimated to be $45 per book. Determine the optimal order size, the maximum shortage level, and the total inventory cost.
- The Uptown Kiln is an importer of ceramics from overseas. It has arranged to purchase a particular type of ceramic pottery from a Korean artisan. The artisan makes the pottery in 120-unit batches and will ship only that exact number of units. The transportation and handling cost of a shipment is $7,600 (not including the unit cost). The Uptown Kiln estimates its annual demand to be 900 units. What storage and handling cost per unit does it need to achieve in order to minimize its inventory cost?The 23,000-seat City Coliseum houses the local professional ice hockey, basketball, indoor soccer, and arena football teams, as well as various trade shows, wrestling and boxing matches, tractor pulls, and circuses. Coliseum vending annually sells large quantities of soft drinks and beer in plastic cups, with the name of the coliseum and the various team logos on them. The local container cup manufacturer that supplies the cups in boxes of 100 has offered coliseum management the following discount price schedule for cups: Order Quantity (boxes) Price per Box 2,000–6,999 $47 7,000–11,999 43 12,000–19,999 41 20,000+ 38 The annual demand for cups is 2.3 million, the annual carrying cost per box of cups is $1.90, and the ordering cost is $320. Determine the optimal order quantity and total annual inventory cost.Craftwood Furniture Company is a U.S.–based furniture manufacturer that offshored all of its actual manufacturing operations to China about a decade ago. It set up a distribution center in Hong Kong, from which the company ships its items to the United States on container ships. The company learned early on that it could not rely on local Chinese freight forwarders to arrange for sufficient containers for the company’s shipments, so it contracted to purchase containers from a Taiwanese manufacturer and then sell them to shipping companies at the U.S. ports the containers are shipped to. Craftwood needs 715 containers each year. It costs $265 to hold a container at its distribution center, and it costs $6,000 to process and receive an order for the containers. The cost of not having sufficient containers and delaying a shipment is $14,000 per container. Determine the optimal order size, minimum total annual inventory cost, and maximum shortage level.