A tire store orders its stock for a popular winter tire once every year. The cost of a tire for the store is $120. The store sells a tire for $140 at the regular price. The regular demand per year is 1,000 tires, which is normally distributed with a standard deviation of 70 tires. Customers do not prefer to buy from an older stock; hence the store does not keep the tires for the next year. The store is able to sell the excess stock at a reduced price of $80 per tire. How many tires the store should order each year?

Algro Inc. keeps a wide range of parts and materials on hand for use in its production processes. Management has recently had difficulty managing parts inventory as demand for its finished goods has increased; they frequently run out of some critical parts while having an endless supply of others. They would like to classify their parts inventory according to the ABC approach to better control inventory. The following is a list of parts, along with their annual usage and unit value: Item Annual Unit Item Annual Unit Number Usage Cost Number Usage Cost 1 36 $350 2 510 30 3 50 23 4 300 45 5 18 1900 6 500 8 7 710 4 8 80 26 9 344 28 10 67 440 11 510 2 12 682 35 13 1216 95 50 14 10 3 15 820 1 KARAN2222222222 16 60 $610 17 120 20 18 270 15 19 45 50 20 19 3200 21 910 3 12 4750 23 30 2710 24 24 1800 25 870 105 26 244 30 27 750 15 28 45 110 29 46 160 30 165 25 a. Classify the inventory items according to the ABC approach using the dollar value of annual demand. b. Clearly explain why you…

Andy's Auto Dealership (AAD) is a family-run auto dealership selling both new and used vehicles. In an average month, AAD sells a total of 160 vehicles. New vehicles represent 60 percent of sales, and used vehicles represent 40 percent of sales. Max has recently taken over the business from his father. His father always emphasized the importance of carefully managing the dealership's inventory. Inventory financing was a significant expense for AAD. Max's father consequently taught him to keep inventory turns as high as possible. Examining the dealership's performance over recent years, Max discovered that AAD had been turning its inventory (including both new and used vehicles) at a rate of 8 times per year. What is AAD's average inventory (including both new and used vehicles)? Drilling down into the numbers, Max has determined that the dealerships new and used businesses appear to behave differently. He has determined that turns of new vehicles are 7.2 per year, while turns of used…

A Mercedes dealer purchases vehicles for $20,000. The annual holding cost is estimated to be 25% of the dollar value of inventory. The dealer sells an average of 500 cars per year. He believes that demand is backlogged, but estimates that if he is short one car for one year, he will lose $20,000 in future profits. Each time the dealer places an order for cars, the ordering cost amounts to $10,000. Determine the Mercedes dealer's optimal (?,?) ordering policy.

True or False: Single-Period inventory model makes the assumption that the demand follows a standard normal distribution.

A manufacturing plant procures 100,000 filters per year.  Each unit has a fixed order cost is $50. To maintain the inventory in optimal conditions, there is a carrying cost rate of 10% per year. The vendor of filters has offered the following price breaks: for orders of more than 5,000 filters, cost is $4.50/unit; for orders between 1,000 and 5,000 filters, cost is $4.75/unit; orders less than 1,000 filters have a cost of $5.00/unit.    Find the economic order quantity. Calculate the average annual cost for the optimal solution.

Milk is stocked at the grocery store each week. At the end of the week unsold milk is reduced in price by 50% of its selling price, and always sells for this lower price instantly. Weekly demand for milk is normally distributed with a mean of 200 gallons and standard deviation of 25 gallons.  Each gallon of milk costs $1.75.  Assuming a service level of 90% and that the store sells the milk for $3 per gallon, how many gallons should the store order this week?

Cynthia​ Knott's oyster bar buys fresh Louisiana oysters for ​$5 per pound and sells them for ​$9 per pound. Any oysters not sold that day are sold to her​ cousin, who has a nearby grocery​ store, for ​$3 per pound. Cynthia believes that demand follows the normal​ distribution, with a mean of 100 pounds and a standard deviation of 14 pounds. How many pounds should she order each​ day? Refer to the standard normal table LOADING... for​ z-values. Part 2 Cynthia should order enter your response here pounds of oysters each day ​(round your response to one decimal​ place).

A firm experiences demand with a mean of 100 units per day. Lead time demand is normally distributed with mean 1000 units and standard deviation 200 units. It costs $6 to hold one unit for one year. If the firm wants to meet 90% of all demand on time, what is the expected annual cost of holding safety stock? Assume that each order costs $50.