Demand for your product averages 20 units per day, with a standard deviation of 4. Your lead time is 5 days. What should your reorder point be, if you want to have a 95% chance of not running out of products during the lead time? With this reorder level, how much safety stock do you have?
Q: Medtronic sells medical devices. The company enjoys many growth opportunities, and so it measures…
A: Given Information: Inventory Holding Cost: 25% per year Inventory turnover = 3 times a year Gross…
Q: What is the relationship between the average inventory and the in-stock probability?a. The more the…
A: Average inventory is defined as which estimates the value of specific good or set of goods during…
Q: Assume a firm seeks to minimize its total inventory costs of ordering widgets that it needs for its…
A: Given- Annual demand (D) = 30,000 widgetsOrdering cost (S) = $25 per orderHolding cost (H) = $6…
Q: A manager of an inventory system believes that inventory models are important decision making aids.…
A: Below is the solution:-
Q: The National Company uses 150,000 gallons of hydrochloric acid per month. The cost of carrying the…
A: The question is related to Inventory Management. The Economic Order Quantity is that level of…
Q: Alocal retailer anticipates an annual demand 12000 units of a product. The retailer allows shortages…
A: Disclaimer- Since you have asked multiple questions we will solve the first question for you. If you…
Q: Angie needed a new refrigerator after her old one stopped working and couldn’t be repaired. At the…
A: Bundling is when businesses combine some of their goods or services together as a single combined…
Q: Lead time for one of your fastest-moving products is 19 days. Demand during this period averages 90…
A: Re-order point is the point at which a company has to order again to meet customer demand.
Q: Demand during lead time for one brand of TV is normally distributed with a mean of 36 TVs and a…
A: Given that: Mean demand (d) = 36 TV's σ = 15 TV's Service Level = 90% ≈0.90
Q: Demand is variable and the average demand is equal to 30 units per day, with a lead time standard…
A: Average daily demand (d) = 30 units Standard deviation of daily demand (d) = 5 units Lead time (L) =…
Q: A cable company needs to stock universal remote devices. They expect annual demand to be 1000 and…
A: The ordered quantities to minimize the cost is 162 units up to 200 units and 169 units more than 200…
Q: A printing company uses 2,000 reams of a certain type of paper in a year. The cost of holding one…
A: Given data: Quantity Ordered (in Reams) Price per Ream (in US dollars) 0 - 499 $ 8.00…
Q: Interpretation of the inventory holding period depends on the industry in which a business…
A: Days in inventory are based on the average time period a business keeps before they trade it. Some…
Q: Red Corporation uses the reorder point model to plan its purchases. It sellsitssole product at the…
A: The re-order point is the point at which the company needs to re-fill the inventory stock to avoid…
Q: Shouldn’t a company always select the inventory method that results in the highest net income so the…
A: Below is the solution:-
Q: Your friend is in the process of solving an EOQ problem with the following stipulations: there is a…
A: given, minimum order level = 1000 units maximum order = 5000 units holding costs = 20%
Q: The National Company uses 150,000 gallons of hydrochloric acid per month. The cost of carrying the…
A: Solution is as follows:
Q: Given this information: Lead-time demand = 615 pounds Standard deviation of lead time demand = 48…
A: The company uses the added quantity of product to reduce the risk is known as the safety stock.…
Q: A. An example of a dependent demand inventory item in truck manufacturing is/are: a. New…
A: Production is the process of manufacturing the finished products and services using the raw…
Q: You are the operations manager of a firm that uses the continuous review (EOQ) system to control you…
A: Given data: Annual demand (D) = 25,000 units Ordering cost = $30 per order Holding cost = $8 unit…
Q: Daily demand for a certain product is normally distributed, with a mean of 100 and a standard…
A: 1. It is a continuous order system of ordering goods, in the given scenario. Here, the ordering…
Q: ) What is the optimal order quantity and the minimum annual cost for Bell Computers to order,…
A: EOQ stands for economic order quantity. It is a company's optimal order quantity that undervalues…
Q: The purchasing agent for a company that assembles and sells air-conditioning equipment in a Latin…
A: Implications of price escalations on order size are: Increase in order size Since price is…
Q: Demand is Normally distributed with a mean of 66 per week and a weekly variance of 3. The ordering…
A: NOTE: We are allowed to do one question only. Mean demand = 66 Variance = 3 Ordering cost = 57.5…
Q: Demand for an item is constant at 500 units a year. Unit cost is $50, reorder cost is $80 and…
A: Economic order quantity (EOQ) = Square root of ( 2*Annual demand*ordering cost/handling cost) =…
Q: A firm has $5,000,000 of inventory on average and annual sales of $30,000,000. Assume there are 365…
A: Inventory conversion period means the number of days taken for converting the raw materials into…
Q: Describe the importance of control over inventory ? Describe three inventory cost flow assumptions…
A: "Since you have asked multiple questions, we will the first question for you. If you want any…
Q: Your firm uses the continuous review system to manage a product, and operates 52 weeks a year. The…
A: Given data: Ordering cost = $ 40/order weeks operational (D)= 52 weeks Holding cost = $5 per…
Q: A company has an average demand of 30 units per day. The supplier's lead time averages 7 days.…
A: Reorder point is the minimum point of inventory that triggers more inventory purchasing of the…
Q: Calculate the Economic Order Quantity
A: Given, Order cost S = $500 Holding cost H = $3 Annual Demand D = 1552 units Formula for Economic…
Q: the company expects to sell 38,400 units next year. it operates 355 days a year. annual carrying…
A: Below is the solution:-
Q: Describe what is safety stock and what it provides safety against in inventory management
A: To define: what is safety stock and what it provides safety against in inventory management
Q: A bedding store has a steady demand for 300 mattresses each year. The store orders mattresses from a…
A: Annual demand = 300 Order cost = $50 Annual holding cost = 5% of unit cost Retail price = $250
Q: Do you think the safety stock (safety inventory) could be negative? What is the meaning of a…
A: The term safety stock can be understood as the inventory which is kept as a buffer. It is the…
Q: The following information regarding inventory policy was assembled by the GB Inc. The company uses a…
A: Reorder point is the point where the company’s stock needs to be repurchased to avoid the reduction…
Q: Perpetual Inventory Using FIFO Beginning inventory, purchases,and sales data for Keurig coffee…
A: The solution is as follows:
Q: The following lots of a particular commodity were available for sale during the year Beginning…
A: Given - Beginning inventory 7 units at $49.00 First purchase 18 units at $54.00 Second…
Q: A firm incurs a fixed order cost of $10 per order and 20 percent annual holdingcosts. It purchases…
A: Supply chain management is the management of goods and services, starting from raw material,…
Q: Ordering cost is $40 and annual holding cost is 25 percent of unit price per unit. Which supplier…
A: Given Ordering Cost (Co)- $40 Holding Cost - 25% Demand (D) - 800 units
Q: Alocal retailer anticipates an annual demand 12000 units of a product. The retailers allows…
A: Economic order quantity is the optimum quantity which should be ordered in order to have minimum…
Q: Annual demand is 16000 units, cost per order is $75 and carrying cost per unit as a percentage is…
A: Given - Annual Demand = 16000 units Order Cost = $75 per unit Holding Cost = $45 x 0.10
Q: Consider the company in Question 1. Now the company is considering working with a local supplier.…
A: The question is related to Inventory Management. The Economic Order Quantity is that level of…
Q: un Coca Cola, and I experience known and constant demand for Coke syrup. I use 10,000 liters of…
A: The formula for economic order quantity is: EOQ = square root of: [2 × S× D] / H S = Setup costs…
Q: What is the importance of efficiently controlling the level of inventory investment?describe the…
A: The aim of holding inventories is to permit the firm to isolate the process of purchasing,…
Q: The EOQ is optimal because it a. minimizes the total inventory cost. b. minimizes the…
A: The EOQ is optimal because it
Demand for your product averages 20 units per day, with a standard deviation of 4. Your lead time is 5 days.
- What should your reorder point be, if you want to have a 95% chance of not running out of products during the lead time?
- With this reorder level, how much safety stock do you have?
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 1 images
- The chapter presented various approaches for the control of inventory investment. Discuss three additional approaches not included that might involve supply chain managers.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…Demand for a product is relatively constant at 5 units per day. Lead time for this product is normally distributed with a mean of 20 days and a standard deviation of 4 days. (a) What reorder point provides an 80 percent service level? (b) What reorder point provides a 90 percent service level? (c) If the lead time standard deviation can be reduced from 4 days to 1, what reorder point now provides 90 percent service? How much is safety stock reduced by this change?
- Demand during lead time for one brand of TV is normally distributed with a mean of 36 TVs and a standard deviation of 15 TVs. What safety stock should be carried for Dennis Yu's Appliance Outlet to provide a 90% service level? What is the appropriate reorder point? Use a Z standard deviation table as well What safety stock should be carried for a 90% service level? Safety stock =units (round your response to the nearest whole number). What is the appropriate reorder point? Reorder Point = unitsYou 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 200 units and a standard deviation of 16 units. It is purchased from a wholesaler at a cost of $12.50 per unit. You are using a continuous review system to control this inventory. The supply lead time is 4 weeks. Placingan order costs $50, and the inventory carrying rate per year is 20 percent of the item’s cost. Your firm operates 5 days per week, 50 weeks per year.a. What is the optimal ordering quantity for this item?b. How many units of the item should be maintained as safety stock for 99 percent protection against stockouts during an order cycle?c. If supply lead time can be reduced to 2 weeks, what is the percent reduction in the number of units maintained as safety stock for the same 99 percent stockout protection?d. If through appropriate sales promotions, the demand variability is reduced so that the standard deviation of weekly…(a) AV City stocks and sells a particular brand of laptop. It costs the firm $625 each time it places an order with the manufacturer for the laptops. The cost of carrying one laptop in inventory for a year is $130. The store manager estimates that total annual demand for the laptops will be 1500 units, with a constant demand rate throughout the year. Orders are received within minutes after placement from a local warehouse maintained by the manufacturer. The store policy is never to have stock-outs of the laptops. The store is open for business every day of the year except Christmas Day. Determine the following: 1) Optimal order quantity per order2) Minimum total annual inventory costs3) The number of orders per year4) The time between orders (in working days) (b) Consider four cases of variation in the model parameters as follows: (a) Both ordering cost and carrying cost are 10% less than originally estimated; (b) both ordering cost and carrying cost are 10% higher than originally…
- Annual demand for a product is 13,000 units; weekly demand is 250 units with a standard deviation of 40 units. The cost of placing an order is $100, and the time from ordering to receipt is four weeks. The annual inventory carrying cost is $0.65 per unit. To provide a 98 percent service probability, what must the reorder point be? Suppose the production manager is told to reduce the safety stock of this item by 100 units. If this is done, what will the new service probability be?Daily demand for a certain product is normally distributed, with a mean of 100 and a standard deviation of 15. The supplier is reliable and maintains a constant lead time of 5 days. The cost of placing an order is $10 and the cost of holding inventory is $0.50 per unit per year. There are no stock-out costs, and unfilled orders are filled as soon as the order arrives. Assume sales occur over 360 days of the year. Your goal here is to find the order quantity and reorder point to satisfy a 90 percent probability of not stocking out during the lead time.a. What type of system is the company using?b. Find the order quantity.c. Find the reorder point.The manager of an auto parts store is reviewing the inventory policy for one of their fastest selling products — car batteries. The store sells an average of 40 car batteries every week. The cost to hold one battery in inventory for a year is $15. The ordering cost per order is estimated at $50. The store operates all 52 weeks in a year.Use the information in Scenario 9.5. If the manager decides to order at the economic order quantity, what is the sum of the annual ordering cost and holding cost? Group of answer choices greater than $1800 but less than or equal to $2100
- 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?A retailer uses a periodic review order-up-to model to control the inventory of one of its high volume products. Average demand is 2580 units per week with a standard deviation of 1270. The review period is 5 weeks, the lead time is 11 weeks, and the safety factor used is 0.61. How many stockouts should the retailer expect for this product next 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…