Ada is running a store to sell soft-drink and snacks. For one soft-drink, given the daily demand is 32 bottles with operating 360 days per year. The ordering cost is $10 per order and annual holding cost is $1 per bottle. Lead time is 10 days. Determine the optimal order size Determine the reorder point Determine the safety stock Determine total annual inventory cost Now, daily demand and lead time may vary. Average daily demand is 32 bottles and its standard deviation is 6 bottles.Average lead time is 10 days and its standard deviation is 4 days. Determine the reorder point Determine the safety stock with 95% service level
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- the economic order quantity (see Chapter 12 for EOQformulas) for its halogen lamps. It currently buys all halogenlamps from Specialty Lighting Manufacturers in Atlanta. Annualdemand is 2,000 lamps, ordering cost per order is $30, and annualcarrying cost per lamp is $12.a) What is the EOQ?b) What are the total annual costs of holding and ordering(managing) this inventory?c) How many orders should D iscount-Mart place with SpecialtyLighting per year?I need a detailed explanation on how to solve this problem: A paint shop implements an inventory policy on its stock of white paint, which costs the store $6 per can. Monthly demand for cans of white paint is normal with mean 28 and standard deviation 8. The replenishment lead time is 14 weeks. Excess demand is backordered, but costs $10 per back ordered can in labor and loss of goodwill. There is a fixed cost of $15 per order, and the holding cost is based on 30% interest rate per annum. In your computations, assume 4 weeks per month. - Write down the model name and parameters. - What are the optimal lot size and reorder points for white paint (include the formulas)? - What is the optimal safety stock (include the formula)? *** Suppose the paint shop from the above problem adopts a service level policy. - What are the optimal lot size and reorder points for white paint, such that 90% of the cycles are filled without backordering (include all formulas)? - What is the fill rate…A company operates for 50 weeks a year and uses a fixed quantity inventory system for one of its most important items. Below are the characteristics for the item: Weekly demand follows normal distribution: mean of 400 units and standard deviation of 100 units Order Cost = $40 per order Annual Holding cost = $2/unit/year Desired service level = 95% (z = 1.645) Lead Time = 4 weeks Economic Order Quantity (EOO) = 894 units Now suppose that the management is considering switching to a fixed time inventory system where the time between orders is 2 weeks. Everything else being the same as the information provided for the original problem, which system (Q or P system) is likely to have more safety stock? Please explain why.
- A building materials stockist obtains its cement from a single supplier. Demandfor cement is reasonably constant throughout the year. Last year the company sold 2 000tonnes of cement. It estimates the costs of placing an order at around 25 MU each timean order is placed and charges inventory holding at 20% of purchase cost. The companypurchases cement at 60 MU per tonne.a) How much cement should the company order at a time?b) Instead of ordering EOQ, why not a order convenient 100 tonnes? Please mention formulas and do it in detail so I can understand.3. Skinner’s Fish Market buys fresh Boston bluefish daily for $4.20 per pound and sells it for $6 per pound. At the end of each business day, any remaining bluefish is sold to a producer of cat food for $3 per pound. Daily demand can be approximated by a normal distribution with a mean of 64 pounds and a standard deviation of 11 pounds. What is the optimal order quantity (stocking level)? Round your answer to 2 decimal places. Answer:_______You are in charge of inventory control of a highly successful product retailed by your firm. Weekly demand for this item varies, with an average of 350 units and a standard deviation of 15 units. It is purchased from a wholesaler at a cost of $25.00 per unit. The supply lead time is 7 weeks. Placing an order costs $55.00, and the inventory carrying rate per year is 15 percent of the item's cost. Your firm operates 6 days per week, 50 weeks per year. Refer to the standard normal table The table below shows the total area under the normal curve for a point that is Z standard deviations to the right of the mean. Z 0.00 0.01 0.02 0.03 0.04 0.05 0.06 0.07 0.08 0.09 0.0 0.5000 0.5040 0.5080 0.5120 0.5160 0.5199 0.5239 0.5279 0.5319 0.5359 0.1 0.5398 0.5438 0.5478 0.5517 0.5557 0.5596 0.5636 0.5675 0.5714 0.5754 0.2 0.5793 0.5832 0.5871 0.5910 0.5948 0.5987 0.6026 0.6064 0.6103 0.6141…
- Discount-Mart, a major East Coast retailer, wants todetermine the economic order quantity (see Chapter 12 for EOQformulas) for its halogen lamps. It currently buys all halogenlamps from Specialty Lighting Manufacturers in Atlanta. Annualdemand is 2,000 lamps, ordering cost per order is $30, and annualcarrying cost per lamp is $12. a) What is the EOQ?b) What are the total annual costs of holding and ordering(managing) this inventory?c) How many orders should Discount-Mart place with SpecialtyLighting per year?The sales of Whole Care mouthwash at Jen's of Michigan over the past six months have averaged 2,000 cases per month, which is the current order quantity. Jen's of Michigan's cost is $12.00 per case, and ordering cost is $38. The company estimates its cost of capital to be 12 percent. Insurance, taxes, breakage, handling, and pilferage are estimated to be approximately 6 percent of the item cost. Lead time is 3 days, and considering weekends and holidays, Tom's of Maine operates 250 days per year. Based on the above information please answer the following questions What is EOQ? What is the cost reduction? What is the reorder point? What is Time between Orders (TBO)?Inventory management - Holding costs Consider two products A and B that have identical cost, retail price and demand parameters and the sae short selling season. The newsvendor model is used to manage inventory for both products. Product A is to be dscontinued at the end of the season this year, and the teftovers will be salvaged at 65% of the cost Product B Will be re offered next summer, so any leftovers thts year can be carried over to the next year while incurming a holding cost on each leftover unit equal to 25% of the product's cost. How do the stocking quant.tes for these
- The sales of Whole Care mouthwash at Tom's of Maine over the past six months have averaged 2,000 cases per month, which is the current order quantity. Tom's of Maine's cost is $12.00 per case, and ordering cost is $38. The company estimates its cost of capital to be 12 percent. Insurance, taxes, breakage, handling, and pilferage are estimated to be approximately 6 percent of the item cost. Lead time is 3 days, and considering weekends and holidays, Tom's of Maine operates 250 days per year. Based on the above information please answer the following questions a) What is EOQ? b) What is the cost reduction? c) What is the reorder point? d) What is Time between Orders (TBO)?The concession stand at the Blacksburg High School stadium sells slices of pizza during soccergames. Concession stand sales are a primary source of revenue for high school athletic programs,so the athletic director wants to sell as much food as possible. However, any pizza notsold is given away to the players, coaches, and referees, or it is thrown away. The athletic directorwants to determine a reorder point that will meet, not exceed, the demand for pizza. Pizzasales are normally distributed, with a mean of 6 pizzas per hour and a standard deviation of2.5 pizzas. The pizzas are ordered from Pizza Town restaurant, and the mean delivery time is30 minutes, with a standard deviation of 8 minutes. Currently, the concession stand places an order when it has 1 pizza left. What level of service does this result in?Weiss’s paint store uses a (Q, R) inventory system to control its stock levels. For a particularly popular white latex paint, historical data show that the distribution of monthly demand is approximately normal, with mean 28 and standard deviation 8. Replenishment lead time for this paint is about 14 weeks. Each can of paint costs the store $6. Although excess demands are back-ordered, the store owner estimates that unfilled demands cost about $10 each in bookkeeping and loss-of-goodwill costs. Fixed costs of replenishment are $15 per order, and holding costs are basedon a 30 percent annual rate of interest.a. What are the optimal lot sizes and reorder points for this brand of paint?b. What is the optimal safety stock for this paint?