In a periodic order system, the lead time for a box of weed killer is 2 weeks. Thereviewperiod is 1 week. Demand during the protection interval (i.e. review period +leadtime) averages 218 boxes, with a standard deviation of 40 boxes.a.) What is the cycle-service level when the target inventory is set at 300 boxes?b.) In the fall season, demand for weed killer decreases but also becomes morevariable. Assume demand during the protection interval is expected to decreaseto 180 boxes, but with a standard deviation of 50 boxes. What would be thecycle-service level if management keeps the target inventory level set at 300boxes?C) if the solution is feasible, should the order quantity change

Given- Lead time (L) = 2 weeksReview period (P) = 1 weekProtection interval (L+P) = 2+1 = 3…

Answered: In a periodic order system, the lead…

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 particular branch of ABC Co. is experiencing some inventory control problems. The manager currently orders 5,000 units four times each year to handle annual demand of 20,000 units. Each order costs P15 and each unit costs P1.50 to carry. The branch maintains a safety stock of 200 units. IF proper management is applied, how much will be the inventory cost savings on the particular branch?
Chicago's Hard Rock Hotel distributes a mean of 1,000 bath towels per day to guests at the pool and in their rooms. This demand is normally distributed with a standard deviation of 95 towels per day, based on occupancy. The laundry firm that has the linen contract requires a 4-day lead time. The hotel expects a 98% service level to satisfy high guest expectations. Refer to the standard normal table for z-values. a) What is the reorder point? towels (round your response to the nearest whole number). towels (round your response to the nearest whole number). b) What is the safety stock? Z-Table Z 0.38 0.50 0.67 0.84 1.04 1.28 1.41 1.56 1.65 1.75 2.06 2.33 Pr(Z) 65 69 75 80 85 90 92 94 95 96 98 99
Gentle Ben's Bar and Restaurant uses 7,200 quart bottles of an imported wine each year. The effervescent wine costs $9 per bottle and is served only in whole bottles because it loses its bubbles quickly. Ben figures that it costs $25 each time an order is placed, and holding costs are 40 percent of the purchase price. It takes six weeks for an order to arrive. Weekly demand is 144 bottles (closed two weeks per year) with a standard deviation of 40 bottles. Ben would like to use an inventory system that minimizes inventory cost and will provide a 99 percent service probability. a. What is the economic quantity for Ben to order? b. At what inventory level should he place an order?
Mr. Beautiful, an organization that sells weight training sets, has an ordering cost of $40 for the BB-1 set (BB-1 stands for Body Beautiful Number 1). The carrying cost for BB-1 is $5 per set per year. To meet demand, Mr. Beautiful orders large quantities of BB-1 7 times a year. The stockout cost for BB-1 is estimated to be $50 per set. Over the past several years, Mr. Beautiful has observed the following demand during the lead time for BB-1: Demand During Lead Time 40 50 60 70 80 90 The reorder point for BB-1 is 60 sets. What level of safety stock should be maintained for BB-1? The optimal quantity of safety stock which minimizes expected total cost is Probability 0.1 0.2 0.2 0.2 0.2 0.1 sets (enter your response as a whole number).
Southern Markets, Inc. is considering the use of ABCanalysis to focus on the most critical SKUs in its inventory.Currently, there are approximately 20,000 different SKUswith a total dollar usage of $10,000,000 per year.a. What would you expect to be the number of SKUs and thetotal annual dollar usage for A items, B items, and C itemsat Southern Markets, Inc.? b. The following table provides a random sample of the unitvalues and annual demands of eight SKUs. Categorizethese SKUs as A, B, and C items.
A retailer stocks baseball caps for three different teams. Information for each can be found in the table below. How much potential sales revenue are they losing each week due to stockouts? 864 1158 1366 1540
An electronics retailer wants to develop an inventory policy to achieve 99% chance of not getting stockouts for a chip. The daily demand for the chip is estimated to be Normal with mean 200 and standard deviation of 20. They count the chip inventory every 2 weeks to place an order, and it takes 11 days for the ordered chips to be delivered. The retailer operates 7 days a week, 365 days a year. They are going to implement an order-up-to model. A) What base stock level should they choose? B) What is the number of chips they would have on order (on average)? C) When they checked their inventory of chips to place a new order, they found that they ran out of stock completely. In addition, they have 10 chips on way to be delivered, while there are five customers who paid for 20 chips in total and are waiting to receive their chips. How many chips should the retailer order?
Palin’s Muffler Shop has one standard muffler that fits a large variety of cars. The shop wishes to establish a periodic review system to manage inventory of this standard muffler. Use the information in the following table to determine the optimal inventory target level (or order-up-to level). Annual demand 2,750 mufflers Ordering cost $ 35 per order Standard deviation of daily demand 6 mufflers per working day Service probability 76 % Item cost $ 28.00 per muffler Lead time 4 working days Annual holding cost 22 % of item value Working days 275 per year Review period 21 working days a. What is the optimal target level (order-up-to level)? If the service probability requirement is 93 percent, the optimal target level will: Increase Decrease Stay the same
Fisk Corporation is trying to improve its inventory control system and has installed an online system at its retail stores. Fisk anticipates sales of 58,800 units per year, an ordering cost of $4 per order, and carrying costs of $1.50 per unit. In the second year, Fisk Corporation finds that it can reduce ordering costs to $1 per order, but carrying costs will stay the same at $1.50 per unit. a-1. What is the economic ordering quantity for the second year? Economic ordering quantity (EOQ) a-2. How many orders will be placed during the second year? Number of orders a-3. What will the average inventory be for the second year? Average inventory Total costs units units a-4. What is the total cost of ordering and carrying inventory for second year? LA
How do you do this? Please list step by step instructions.
Daily demand for a product is 138 units, with a standard deviation of 36 units. The review period is 10 days and the lead time is 6 days. At the time of review, 58 units are in stock. If 98% service probability is desired (corresponding z = 2.05), how many units should be ordered? (please rounded to integer)
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?

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