One of the products stocked at Weiss’s paint store, mentioned in Problem 14, is a certain type of highly volatile paint thinner that, due to chemical changes in the product,has a shelf life of exactly one year. Al Weiss purchases the paint thinner for $20 a galloncan and sells it for $50 a can. The supplier buys back cans not sold during the yearfor $8 for reprocessing. The demand for this thinner generally varies from 20 to 70cans a year. Al assumes a holding cost for unsold cans at a 30 percent annual interestrate.a. Assuming that all values of the demand from 20 to 70 are equally likely, what is theoptimal number of cans of paint thinner for Al to buy each year?b. More accurate analysis of the demand shows that a normal distribution gives abetter fit of the data. The distribution mean is identical to that used in part (a), andthe standard deviation estimator turns out to be 7. What policy do you nowobtain?
Critical Path Method
The critical path is the longest succession of tasks that has to be successfully completed to conclude a project entirely. The tasks involved in the sequence are called critical activities, as any task getting delayed will result in the whole project getting delayed. To determine the time duration of a project, the critical path has to be identified. The critical path method or CPM is used by project managers to evaluate the least amount of time required to finish each task with the least amount of delay.
Cost Analysis
The entire idea of cost of production or definition of production cost is applied corresponding or we can say that it is related to investment or money cost. Money cost or investment refers to any money expenditure which the firm or supplier or producer undertakes in purchasing or hiring factor of production or factor services.
Inventory Management
Inventory management is the process or system of handling all the goods that an organization owns. In simpler terms, inventory management deals with how a company orders, stores, and uses its goods.
Project Management
Project Management is all about management and optimum utilization of the resources in the best possible manner to develop the software as per the requirement of the client. Here the Project refers to the development of software to meet the end objective of the client by providing the required product or service within a specified Period of time and ensuring high quality. This can be done by managing all the available resources. In short, it can be defined as an application of knowledge, skills, tools, and techniques to meet the objective of the Project. It is the duty of a Project Manager to achieve the objective of the Project as per the specifications given by the client.
One of the products stocked at Weiss’s paint store, mentioned in Problem 14, is a certain type of highly volatile paint thinner that, due to chemical changes in the product,
has a shelf life of exactly one year. Al Weiss purchases the paint thinner for $20 a gallon
can and sells it for $50 a can. The supplier buys back cans not sold during the year
for $8 for reprocessing. The demand for this thinner generally varies from 20 to 70
cans a year. Al assumes a holding cost for unsold cans at a 30 percent annual interest
rate.
a. Assuming that all values of the demand from 20 to 70 are equally likely, what is the
optimal number of cans of paint thinner for Al to buy each year?
b. More accurate analysis of the demand shows that a
better fit of the data. The distribution mean is identical to that used in part (a), and
the standard deviation estimator turns out to be 7. What policy do you now
obtain?
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