Barbara Flynn is in charge of maintaining hospital supplies at General Hospital. During the past year, themean lead time demand for bandage BX-5 was 70 (and was normally distributed). Furthermore, thestandard deviation for BX-5 was 6. Ms. Flynn would like to maintain a 90% service level. Refer to thestandard normal table for z-values.a) What safety stock level do you recommend for BX-5?Safety Stock=_____ unitsb) What is the appropriate reorder point?Reorder point=____unitsZ0.380.500.670.841.041.281.411.561.651.752.062.33Pr(Z)656975808590929495969899

Reorder point is an inventory level that initiates the new ordering process. It can be identified by…

Answered: Barbara Flynn is in charge of…

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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Daily demand for product EPD101 is normally distributed with a mean of 50 units and a standard deviation of 5. Shipping is usually certain with a lead time of 6 days. The cost of placing an order is $8 and annual carrying costs are 20% of unit price of $1.20. A 95% service level is desired for the customers who place orders during the reorder period. Backorders are not allowed. Once stocks are depleted, orders are filled as soon as stocks arrive. No stockout costs. Assume sales made over the entire year.How much to order and what is the reorder point? What is the cost of carrying safety stocks?.
Barbara Flynn is in charge of maintaining hospital supplies at General Hospital. During the past year, the mean lead time demand for bandage BX-5 was 75 (and was normally distributed). Furthermore, the standard deviation for BX-5 was 6. Ms. Flynn would like to maintain a 95% service level. a) What safety stock level do you recommend for BX-5? Safety stock = _ units (round response to the nearest whole number).
Annual demand is 16000 units, cost per order is $75 and carrying cost per unit as a percentage is 10%. The company works 250 weeks a year; the lead-time on all orders placed is 6 working days. Assuming constant lead-time demand, and a unit cost of $45 what is the economic order quantity? What is the reorder point. If lead-time demand shows variability that follows a normal distribution with a mean μ =420 and a standard deviation σ =20, what will the revised reorder point if two stock-outs (shortages) are allowed? What is the company’s reorder point if the probability of a stock-out on any cycle is restricted to 0.05?
A company begins a review of ordering policies for its continuous review system by checking the current policies for a sample of SKUs. Following are the characteristics of one item.Demand (D) = 64 units/week 1Assume 52 weeks per year2Ordering or setup cost (S) = $50/orderHolding cost (H) = $13/unit/yearLead time (L) = 2 weeksStandard deviation of weekly demand = 12 unitsCycle-service level = 88 percenta. What is the EOQ for this item?b. What is the desired safety stock?c. What is the reorder point?d. What are the cost implications if the current policy for this item is Q = 200 and R = 180?
Suppose the weekly demand at each regional distribution center (RDC) is normally distributed with a mean =117 and standard deviation =23. The company is considering to replace the RDCs with one central distribution center (CDC). The CDC would continue to have a continuous review policy, and the delivery lead time from Asia will remain 8 weeks. What is the average weekly demand at CDC?
Your company currently keeps a safety stock of 554 units of a particular product that has a lead time of 10 days. Records indicate that the weekly demand was as follows: 1176 955 780 1052 736 842 748 993 852 738 794 1444 1333 1372 1106 706 923 734 786 729 1357 1165 1277 683 1106 What is the current service level? Input your result as the decimal form and round to 4 decimal places. You are requested to recommend a safety stock that will ensure an average service level of 97.5%. The lead time is not expected to change. What safety stock would you recommend? (0 decimal places)
a. List the major assumptions of the EOQ model.b. How would you respond to the criticism that EOQ models tend to provide misleading resultsbecause values of D, S, and H are, at best, educated guesses?
A distributor of large appliances needs to determine the order quantities and reorderpoints for the various products it carries. The following data refer to a specii c refrigeratorin its product line:Cost to place an orderHolding costCost of refrigeratorAnnual demandStandard deviation of demand during lead timeLead time$10020 percent of product cost per year$500 each500 refrigerators10 refrigerators7 daysConsider an even daily demand and a 365-day year.a. What is the economic order quantity?b. If the distributor wants a 97 percent service probability, what reorder point, R, shouldbe used?
L. Houts Plastics is a large manufacturer of injection-molded plastics in North Carolina. An investigation of the company's manufacturing facility in Charlotte yields the information presented in the table below. How would the plant classify these items according to an ABC classification system? (Round dollar volume to the nearest whole number and percentage of dollar volume to two decimal places.) Item Code Avg. Inventory (units) Value ($/unit)1289 380 3.252347 300 4.002349 120 2.502363 70 1.302394 60 1.752395 25 1.756782 20 1.157844 12 2.058210 10…
I have worked these calcs and I have two that do not make sense. I even attempted to leave no rounding at all but it still comes back incorrect. Can you please show me where I am wrong. I need to turn this in tonight by 9:30 pm. Demand for walnut fudge ice cream at the Sweet Cream Dairy can be approximated by a normal distribution with a mean of 22 gallons per week and a standard deviation of 3.3 gallons per week. The new manager desires a service level of 90 percent. Lead time is two days, and the dairy is open seven days a week. (Hint: Work in terms of weeks.)Use Table B and Table B1. a-1. If an ROP model is used, what ROP would be consistent with the desired service level? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) ROP 8.54 Numeric ResponseEdit Unavailable.8.54correct.gallons a-2. How many days of supply are on hand at the ROP, assuming average demand? (Do not round intermediate calculations. Round your final answer to 2…
The Bucks Grande exhibition baseball team plays 50 weekseach year and uses an average of 350 baseballs per week.The team orders baseballs from Coopers-Town, Inc., aball manufacturer noted for six-sigma-level consistency andhigh product quality. The cost to order baseballs is $100 perorder and the annual holding cost per ball is 38 percent of thepurchase price. Coopers-Town’s price structure is:Order Quantity Price per Unit1–999 $7.501,000–4999 $7.255,000 or more $6.50a. How many baseballs should the team buy per order?b. What is the total annual cost associated with the bestorder quantity?c. Coopers-Town, Inc., discovers that, owing to specialmanufacturing processes required for the Buck’s base-balls, it has underestimated the setup time required on acapacity-constrained piece of machinery. Coopers-Townadds another category to the price structure to provide anincentive for larger orders and thereby hopes to reducethe number of setups required. If the…
An ophthalmologist's office operates 52 weeks per year, 6 days a week. It purchases disposable contact lenses for $11.70 per pair and sells for $50. The demand is 90 pairs per week. Order cost is $54 per order. Annual interest rate is 27%. Lead-time is 3 weeks. Standard deviation of weekly demand is 15 pairs. Given that 98% service-level. Clearly identify different types of stocks: cycle, safety and pipeline. a. Find a (Q, r) policy for this situation c. Find average service level (fill rate) of the policy (a) d. Find average backorder level of the policy (a) e. Find average inventory level of the policy (a)

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