Torrance Refinery produces approximately 23.1 Million barrels of gasoline peryear. A California distributor sources its gasoline from the Torrance refinery.The annual demand for gasoline at the California distributor is 5.3 Millionbarrels. The cost of storing gasoline is approximately $29 per barrel (per year).The cost of placing an order to the Torrance refinery (including shipping) is$7300 per order. Orders will be received gradually instead of delivered all atonce (hence EPQ).At what quantity will the total cost of procurement be the lowest?Round your answer to the nearest whole number. Do NOT include a comma.For example, answer like 103542 and NOT 103,542Answer: 58845Check From the previous question... Torrance Refinery produces approximately23.1 Million barrels of gasoline per year. A California distributor sourcesits gasoline from the Torrance refinery. The annual demand for gasolineat the California distributor is 5.3 Million barrels. The cost of storinggasoline is approximately $29 per barrel (per year). The cost of placingan order to the Torrance refinery (including shipping) is $7300 per order.Orders will be received gradually instead of delivered all at once (henceEPQ).How many days does each production run last at the Torrance Refinery toserve the California distributor?Round your answer to 2 decimal places. For example, answer like 3.21Answer:CheckX

Given data: Production per year (p)= 23.1 Million barrel Demand per year (D) = 5.3 Million barrels…

Answered: Torrance Refinery produces…

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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GameStop has maintained 75% service level for inventory of PlayStation 5. Mean demand during lead time is 166 PlayStations, and the standard deviation during lead time is 58 PlayStations. The annual cost of carrying one PlayStation in inventory is $12. The store’s operations analyst recently told GameStop's management that they could expect a $550 improvement in profit (based on current figures of cost per PlayStation) if the service level were increased to 97.5%. Is it worthwhile for GameStop to make this change?
The TransCanada Lumber Company and Mill processes 10,000 logs annually, operating 250 days per year. Imme-diately upon receiving an order, the logging company’s supplier begins delivery to the lumber mill at the rate of 60 logs per day. The lumber mill has determined that the or-dering cost is $1600 per order, and the cost of carrying logs in inventory before they are processed is $15 per log on anannual basis. Determine the following:a. The optimal order sizeb. The total inventory cost associated with the optimalorder quantityc. The number of operating days between ordersd. The number of operating days required to receive anorder
1(a). Weekly demand for EPSON printers at a WALMART store is normally distributed with a mean of 280 and a standard deviation of 180. The store manager continuously monitors inventory and currently orders 1,100 printers each time the inventory drops to 700 printers. EPSON currently takes two weeks to fill an order. How much safety inventory should WALMART carry? What is the Cycle Service Level (CSL)? What is the expected shortage per replenishment cycle (ESC)? What is the fill rate (fr)?
Golden Crust Bakery buys flour in 25-pound bags. The bakery uses an average of 1,215 bags a year. Preparing an order and receiving a shipment of flour involves a cost of $10 per order. Annual holding costs are $75 per bag. Once an order for flour is placed, it takes six (6) days to receive the order from the flour factory. The bakery operates 350 days per year. Calculate the following: Economic Order Quantity Expected number of orders (Order Frequency) Average inventory The annual holding cost The annual ordering cost The total annual cost of inventory management Reorder point If holding costs were to increase by $9 per year, how much would that affect the minimum total annual cost?
A sporting goods company has a distribution center that maintains inventory of fishing rods. The fishing rods have the following demand, lead time, and cost characteristics: Average demand = 130 units per day, with a standard deviation of 12 units Average lead time = 12 days with a standard deviation of 1 day 250 days per year in the business year Unit cost = $28 Desired service level = 97.5% Ordering cost $53 Inventory carrying cost = 25% a. What is the standard deviation of demand during lead time? b. How many fishing rods should the distribution center carry to provide the desired service level? c. What is the EOQ? d. What is the average cycle stock?
University Drug Pharmaceuticals orders its antibiotics every two weeks (14 days) when a salesperson visits from one of the pharmaceutical companies. Tetracycline is one of its most prescribed antibiotics, with average daily demand of 2,000 capsules. The standard deviation of daily demand was derived from examining prescriptions filled over the past three months and was found to be 800 capsules. It takes f ive days for the order to arrive. University Drug would like to satisfy 99 percent of the prescriptions. The salesperson just arrived, and there are currently 25,000 capsules in stock.How many capsules should be ordered?
14. 12 The purchasing manager for the Atlantic Steel Company must determine a policy for ordering coal to operate 12 converters. Each converter requires exactly 5 tons of coal per day to operate, and the firm operates 360 days per year. The purchasing manager has determined that the ordering cost is $80 per order and the cost of holding coal is 20% of the average dollar value of inventory held. The purchasing manager has negotiated a contract to obtain the coal for $12 per ton for the coming year. a. Determine the optimal quantity of coal to receive in each order. (Ans: 1200 tons) b. Determine the total inventory-related costs associated with the optimal ordering policy (do not include the cost of the coal). (Ans: TC= $2880) c. If 5 days of lead time are required to receive an order of coal, how much coal should be on hand when an order is placed? (Ans= R=300 tons)
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The amount of denim used daily by the Southwest ApparelCompany in its manufacturing process to make jeans isnormally distributed with an average of 4000 yards ofdenim and a standard deviation of 600 yards. The lead timerequired to receive an order of denim from the textile mill is a constant 7 days. Determine the safety stock and re-order point if the company wants to limit the probability of a stockout and work stoppage to 5%.

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