A daily newspaper is stocked by a coffee shop so its patrons can purchase and read it while they drink coffee. The newspapercosts $1.17 per unit and sells for $1.75 per unit. If units are unsold at the end of the day, the supplier takes them back at arebate of $1 per unit. Assume that daily demand is approximately normally distributed with μ = 150 and a = 30.(a) What is your recommended daily order quantity for the coffee shop? (Round your answer to the nearest integer.)(b) What is the probability that the coffee shop will sell all the units it orders? (Round your answer to four decimal places.)(c) In problems such as these, why would the supplier offer a rebate as high as $1? For example, why not offer a nominalrebate? Find the recommended order quantity at 25¢ per unit. (Round your answer to the nearest integer.)What happens to the coffee shop's order quantity as the rebate is reduced?The higher rebate ---Select-- the quantity that the coffee shop should order.

Cost of newspaper (C) = $1.17Selling Price of newspaper (P) = $1.75Mean demand =150Standard…

Answered: A daily newspaper is stocked by a…

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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A company has an average demand of 30 units per day. The supplier's lead time averages 7 days. Assume that the combined standard deviation of demand over the lead time has been calculated and is equal to 20 units. One unit costs $10 and the inventory carrying cost is 25 percent. What is the reorder point for the company if it decides on a 99 percent service level?
A coffee shop consumes 350 lbs of coffee per week at a steady rate. The coffee shop buys coffee from a supplier at the cost of $10 per lb, and ordering cost of $5 per order. The supplier takes 8 days to deliver an order (assume that 1 week = 7 days). What should be the reorder point (in pounds) for the coffee shop (i.e., at what level of inventory it should place an order with the supplier).
Stuart's Custom Golf manufactures steel castings for use in premium lob wedges. The annual demand for these steel castings is 1,500 units. Stuart's Custom Golf can produce 12 steel castings per hour and the company works an 8 hour day for 250 days each year.The cost to set up for production of the steel castings is $1000. Each steel casting costs $8.85. The company uses a rate of 30% of the item cost to determine the annual holding cost. Calculate the economic production quantity.
Andy's Job Shop buys two parts (Tegdiws and Widgets) for use in its production system from two different suppliers. The parts are needed throughout the entire 52-week year to assemble Uediracs for sale. Tegdiws are used at a relatively constant rate but the use of Widgets vary with demand. Andy wants to improve his inventory management system and use either a "P" system or a "Q" system. What are the advantages and disadvantages of each system in this application and what information is needed to choose between them?
A daily newspaper is stocked by a coffee shop so its patrons can purchase and read it while they drink coffee. The newspaper costs $1.14 per unit and sells for $1.55 per unit. If units are unsold at the end of the day, the supplier takes them back at a rebate of $1 per unit. Assume that daily demand is approximately normally distributed with µ = 150 and σ = 30. (a) What is your recommended daily order quantity for the coffee shop? (Round your answer to the nearest integer.) (b) What is the probability that the coffee shop will sell all the units it orders? (Round your answer to four decimal places.) (c) In problems such as these, why would the supplier offer a rebate as high as $1? For example, why not offer a nominal rebate? Find the recommended order quantity at 25¢ per unit. (Round your answer to the nearest integer.) What happens to the coffee shop's order quantity as the rebate is reduced? The higher rebate ---Select--- ▾ the quantity that the coffee shop should order.
Give typed full explanation
7
A components manufacturer uses approximately 20,000 units annually of an item. They are used at a steady rate during the 250 workdays that the plant operates. The cost of each item is $7.00, and the annual carrying cost is $0.50 per unit per year. The ordering cost is $50. What is the economic order quantity?
You are a newsvendor selling the San Pedro Times every morning. Before you get to work, you go to the printer and buy the day's paper for $0.25 a copy. You sell a copy of the San Pedro Times for $1.30. Daily demand is distributed normally with mean = 260 and standard deviation = 46. At the end of each morning, any leftover copies are worthless and they go to a recycle bin. a. How many copies of the San Pedro Times should you buy each morning? Note: Use Excel's NORM.S.INV() function to find the z value. Round your z value and service level to 2 decimal places and final answer to the nearest whole number. Optimal order quantity b. Based on a, what is the probability that you will run out of stock? Note: Round your answer to the nearest whole percent. Probability %
A manufacturer buys cardboard boxes from a supplier. The annual demand is 40,000 boxes and is uniformly distributed. The boxes cost $5 each. The estimated order cost is $10, and the carrying cost rate is 20% per year. What is the EOQ and what is the annual order and carrying cost? How many times a year are orders placed, and what is the average time, in weeks, between orders? Using the answer from (b), if you round the average time between orders to the nearest week, what should the order quantity be? Would you recommend using this order quantity and time interval? Suppose that the actual demand turns out to be 80,000 boxes instead of 40,000 boxes.If you had used the EOQ from the (a), what would be the annual order and carrying cost be?
David's Delicatessen flies in Hebrew National salamis regularly to satisfy a growing demand for the salamis in Silicon Valley. The owner, David Gold, estimates that the demand for the salamis is pretty steady at 175 per month. The salamis cost Gold $1.85 each. The fixed cost of calling his brother in New York and having the salamis flown in is $200. It takes three weeks to receive an order. Gold's accountant, Irving Wu, recommendsan annual cost of capital of 22 percent, a cost of shelf space of 3 percent of the value of the item, and a cost of 2 percent of the value for taxes and insurance. How many salamis should Gold have on hand when he phones his brother to send another shipment?
Delaney Co. uses 12,000 of an item per year. They are open 300 days per year. The item takes 8 days from the time they place an order until they receive it. They like to maintain a safety stock of 200. What is Delaney's reorder point for this item?

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