2.9 A company wants to develop a level production plan. The beginning inventory is zero.Demand for the next four periods is given in what follows.a. What production rate per period will give a zero inventory at the end of period 4?b. When and in what quantities will back orders occur?c. What level production rate per period will avoid back orders? What will be the end-ing inventory in period 4?PeriodForecast DemandPlanned ProductionPlanned Inventory01234Total9599

Answered: 2.9 A company wants to develop a level…

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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(2-b) A firm's demand in the next four quarters is forecast to be 400, 600, 800, and 700 units. Given that beginning inventory is 600, desired ending inventory in quarter 4 is 300, inventory holding cost is $6 per unit per quarter, and production cost is $50 per unit, calculate the cost of a level production plan.
Forrest and Dan make boxes of chocolates for which the demand is uncertain. Forrest says, “That’s life.” On the other hand, Dan believes that some demand patterns exist that could be useful for planning the purchase of sugar, chocolate, and shrimp. Forrest insists on placing a surprise chocolatecovered shrimp in some boxes so that “You never know what you’ll get.” Quarterly demand (in boxes of chocolates) for the last 3 years follows: Quarter Year 1 Year 2 Year 3 1 2 3 4 3,000 1,700 900 4,400 3,300 2,100 1,500 5,100 3,502 2,448 1,768 5,882 Total 10,000 12,000 13,600 a. Use intuition and judgment to estimate quarterly demand for the fourth year.b. If the expected sales for chocolates are 14,800 cases for year 4, use the multiplicative seasonal method to prepare a forecast for each quarter of the year. Are any of the quarterly forecasts different from what you thought you would get in part (a)?
1. Forrest and Dan make boxes of chocolates for which the demand is uncertain. Forrest says, "That's life." On the other hand, Dan believes that some demand patterns exist that could be useful for planning the purchase of sugar, chocolate, and shrimp. Forrest insists on placing a surprise chocolate-covered shrimp in some boxes so that "You never know what you'll get." Quarterly demand (in boxes of chocolates) for the last three years is shown in the table below: b. If the expected sales for chocolates are 14,400 cases for year 4, use the multiplicative seasonal method to prepare a forecast for each quarter of the year. (Round all intermediate calculations to two decimal places.) The first quarter forecast is what? boxes of chocolates. (Enter your response rounded to the nearest whole number.)
A hospital must order the drug Porapill from DaisyDrug Company. It costs $500 to place an order and $30 toreview the hospital’s inventory of the drug. Annual demandfor the drug is N(10,000, 640,000), and it costs $5 to holdone unit in inventory for one year. Orders arrive one monthafter being placed. Assume that all shortages are backlogged.a Estimate R and the number of orders per year thatshould be placed.b Using the answer in part (a), determine the optimal(R, S) inventory policy. Assume that the shortage costper unit of the drug is $100.
As with other products, Fisher-Price faces the decision of how many Weather Teddy units to order for the comingholiday season. Members of the management team suggested order quantities of 15,000, 18,000, 24,000, or28,000 units. The wide range of order quantities suggested indicates considerable disagreement concerning themarket potential. The product management team asks you for an analysis of the stock-out probabilities forvarious order quantities, an estimate of the profit potential, and to help make an order quantity recommendation.Fisher-Price expects to sell Weather Teddy for $24 based on a cost of $16 per unit. If inventory remains afterthe holiday season, Fisher-Price will sell all surplus inventory for $5 per unit. After reviewing the sales historyof similar products, Fisher-Price’s senior sales forecaster predicted an expected demand of 20,000 units with a.95 probability that demand would be between 10,000 units and 30,000 units. Compute the probability of a stock-out for the…
As with other products, Fisher-Price faces the decision of how many Weather Teddy units to order for the comingholiday season. Members of the management team suggested order quantities of 15,000, 18,000, 24,000, or28,000 units. The wide range of order quantities suggested indicates considerable disagreement concerning themarket potential. The product management team asks you for an analysis of the stock-out probabilities forvarious order quantities, an estimate of the profit potential, and to help make an order quantity recommendation.Fisher-Price expects to sell Weather Teddy for $24 based on a cost of $16 per unit. If inventory remains afterthe holiday season, Fisher-Price will sell all surplus inventory for $5 per unit. After reviewing the sales historyof similar products, Fisher-Price’s senior sales forecaster predicted an expected demand of 20,000 units with a.95 probability that demand would be between 10,000 units and 30,000 units. Question: One of Fisher-Price’s managers felt…
Dorothy’s pastries are freshly baked and sold at several spe-cialty shops throughout Perth. When they are a day old, theymust be sold at reduced prices. Daily demand is distributedas follows:Demand Probability50 0.25150 0.50200 0.25Each pastry sells for $1.00 and costs $0.60 to make. Each onenot sold at the end of the day can be sold the next day for$0.30 as day-old merchandise. How many pastries should bebaked each day?
1. In a manufacturing company:Beginning Inventory + Purchases = Cost of Goods Available for Sale a) True b) False 2. Manufacturers have three unique inventory categories: Raw Materials, Work in Process, and Finished Goods. But retailers have only an Inventory account. a) True b) False 3. Period costs are any costs that are not product costs like Commission Expense, Office rent Expense, Advertisement Expense, Office Salary Expense. a) True b) False
You are the executive chef at a large wedding facility, and a wedding with a confirmed count of 168 is scheduled for tomorrow at noon. Everything has been ordered except the shrimp, which was missing from the last purchase order. It will have to be a last-minute rush order, and only one supplier can get it to you in time. The purchase order will be for frozen raw, U 16-20, shrimp peeled, de-veined, tail-on, in 5-pound boxes (according to your spec for the product). You’ve dealt with this supplier before, and made a note to yourself on the jumbo shrimp spec that this vendor’s product averages 19 to 20 shrimp per pound and has a 96% yield. Catering policy dictates that a 10% buffer be provided for unexpected guests, and the catering menu states that 5 shrimp are to be served per person. If you have 4 pounds of good jumbo shrimp on hand, how much will you order for the wedding? Will there be any leftover product? How much?
A jewelry manufacturer is creating a routine order schedule for some new products: J66 and J67. J66 can be ordered any time. J67 is set up to be ordered every 4 weeks. The company is closed 2 weeks out of a 52 week year otherwise it is open. Given the following, show me the calculation (I have provided the final answer) the questions at the end: J66 acceptable stockout risk = 2.5%, lead time = 2 weeks, ordering cost =$70, annual holding cost = 30%, unit cost =$15, standard deviation = 4 units per week, and average weekly demand is 60 units. J67 acceptable stockout risk = 2.5%, lead time = 2 weeks, ordering cost =$30, annual holding cost = 30%, unit cost =$20, standard deviation = 5 units per week, and average weekly demand is 70 units. I know the reorder point for j67 is 153 units on hand. 1) Show me the math to come up with the 153 units answer. 2) What is the reorder point for the J66? (I know the answer is 306 units so show me the calculation), 3) If the J67 has 110 units on…
The materials manager for a billiard ball maker must periodically place orders for resin, one of the raw materials used in producing billiard balls. She knows that manufacturing uses resin at a rate of 50 kilograms each day, and that it costs $.04 per day to carry a kilogram of resin in inventory. She also knows that the order costs for resin are $100 per order, and that the lead time for delivery is four days. If the order size was 1,000 kilograms of resin, what would be the average inventory level?
(1-b) XYZ company produces staplers and other items. The production cost per unit is $8 and the cost of setting up the production line for this is $60. The annual holding cost rate is 30%. The company works 250 days per year. The production rate for this product is 120 per day. If the annual demand is 20,000 units, i. Which batch size should the company use? ii. What is the minimum monthly cost? iii. What is the total production time allocated to this product annually?

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