32. A manager must set up inventory ordering systems for two new production items: P34 and P35. P34 can be ordered at any time, but P35 can be ordered only once every 4 weeks. The company operates 50 weeks a year, and the weekly usage rates for both items are normally distributed. The manager has gathered the following information about the items. Item P34 Average weekly demand 60 units Standard deviation 70 units 4 units per week 5 units per week $15 $20 30% 30% $70 $30 2 weeks 2 weeks 2.5% Item P35 Unit cost Annual holding cost Ordering cost Lead time Acceptable stockout risk 2.5% a. When should the manager reorder each item? b. Compute the order quantity for P34. c. Compute the order quantity for P35 if 110 units are on hand at the time the order is placed.

32. A manager must set up inventory ordering systems for two new production items: P34 and P35. P34 can be ordered at any time, but P35 can be ordered only once every 4 weeks. The company operates 50 weeks a year, and the weekly usage rates for both items are normally distributed. The manager has gathered the following information about the items. Item P34 Average weekly demand 60 units Standard deviation 70 units 4 units per week 5 units per week $15 $20 30% 30% $70 $30 2 weeks 2 weeks 2.5% Item P35 Unit cost Annual holding cost Ordering cost Lead time Acceptable stockout risk 2.5% a. When should the manager reorder each item? b. Compute the order quantity for P34. c. Compute the order quantity for P35 if 110 units are on hand at the time the order is placed.

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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