Problem 20-10 (Algo) You are a newsvendor selling San Pedro Times every morning. Before you get to work, you go to the printer and buy the day's paper for $0.40 a copy. You sell a copy of San Pedro Times for $1.30. Daily demand is distributed normally with mean = 330 and standard deviation = 66. At the end of each morning, any leftover copies are worthless and they go to a recycle bin. d of each

Problem 20-10 (Algo) You are a newsvendor selling San Pedro Times every morning. Before you get to work, you go to the printer and buy the day's paper for $0.40 a copy. You sell a copy of San Pedro Times for $1.30. Daily demand is distributed normally with mean = 330 and standard deviation = 66. At the end of each morning, any leftover copies are worthless and they go to a recycle bin. d of each

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter9: Decision Making Under Uncertainty

Section: Chapter Questions

Problem 46P

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Scenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing expenditures for packaging materials with Jeff Joyner. Ben was particularly disturbed about the amount spent on corrugated boxes purchased from Southeastern Corrugated. Ben said, I dont like the salesman from that company. He comes around here acting like he owns the place. He loves to tell us about his fancy car, house, and vacations. It seems to me he must be making too much money off of us! Jeff responded that he heard Southeastern Corrugated was going to ask for a price increase to cover the rising costs of raw material paper stock. Jeff further stated that Southeastern would probably ask for more than what was justified simply from rising paper stock costs. After the meeting, Ben decided he had heard enough. After all, he prided himself on being a results-oriented manager. There was no way he was going to allow that salesman to keep taking advantage of Coastal Products. Ben called Jeff and told him it was time to rebid the corrugated contract before Southeastern came in with a price increase request. Who did Jeff know that might be interested in the business? Jeff replied he had several companies in mind to include in the bidding process. These companies would surely come in at a lower price, partly because they used lower-grade boxes that would probably work well enough in Coastal Products process. Jeff also explained that these suppliers were not serious contenders for the business. Their purpose was to create competition with the bids. Ben told Jeff to make sure that Southeastern was well aware that these new suppliers were bidding on the contract. He also said to make sure the suppliers knew that price was going to be the determining factor in this quote, because he considered corrugated boxes to be a standard industry item. As the Marketing Manager for Southeastern Corrugated, what would you do upon receiving the request for quotation from Coastal Products?
Assume the demand for a companys drug Wozac during the current year is 50,000, and assume demand will grow at 5% a year. If the company builds a plant that can produce x units of Wozac per year, it will cost 16x. Each unit of Wozac is sold for 3. Each unit of Wozac produced incurs a variable production cost of 0.20. It costs 0.40 per year to operate a unit of capacity. Determine how large a Wozac plant the company should build to maximize its expected profit over the next 10 years.
Problem 20-10 (Algo) You are a newsvendor selling San Pedro Times every morning. Before you get to work, you go to the printer and buy the day’s paper for $0.50 a copy. You sell a copy of San Pedro Times for $1.25. Daily demand is distributed normally with mean = 335 and standard deviation = 67. At the end of each morning, any leftover copies are worthless and they go to a recycle bin. a. How many copies of San Pedro Times should you buy each morning? (Use Excel's NORMSINV() function to find the correct critical value for the given α-level. Round your z-value to 2 decimal places and final answer to to 2 decimal places.) b. Based on a, what is the probability that you will run out of stock? (Round your answer to the nearest whole number.)
Dorothy’s pastries are freshly baked and sold at several spe-cialty shops throughout Perth. When they are a day old, theymust be sold at reduced prices. Daily demand is distributedas follows:Demand Probability50 0.25150 0.50200 0.25Each pastry sells for $1.00 and costs $0.60 to make. Each onenot sold at the end of the day can be sold the next day for$0.30 as day-old merchandise. How many pastries should bebaked each day?
1. Timothy received $100 for his birthday. He wants to buy either a new skateboard or a new mp3 player to listen to music while working out but he can buy only one. a. Which core principle is represented in this scenario above (if any). b. give an xplanation.
A Mercedes dealer pays $40,000 for each car purchased (wholesale price). The annual holding cost is estimated to be 30% of the dollar value of inventory. The dealer sells an average of 1200 cars per year. They believe that demand is backlogged but estimate that if they are short one car for one year, the loss in future profits is about 10% of the wholesale price. Each time the dealer places an order for cars, ordering costs amount to $1600. Assume there are 360 work days per year. Question: If the Mercedes dealer wants to limit backorders so that they occur 20% of the time, what is the maximum number of backorders that should be allowed (assuming the optimal order quantity doesn't change)?
Problem #2Cassorla’s Clothes sells a large number of white dress shirts. The shirts, which bear the store label,are shipped from a manufacturer in New York City. Hy Cassorla, the proprietor, says, “I want to besure that I never run out of dress shirts. I always try to keep at least a two months’ supply instock. When my inventory drops below that level, I order another two-month supply. I’ve beenusing that method for 20 years, and it works.”The shirts cost $6 each and sell for $15 each. The cost of processing an order and receiving newgoods amounts to $80, and it takes three weeks to receive a shipment. Monthly demand isapproximately normally distributed with mean 120 and standard deviation 32. Assume a 20percent annual interest rate for computing the holding cost.a) What value of Q and R is Hy Cassorla sing to control the inventory of white dress shirts?b) What fill rate (Type 2 service level) is being achieved with the current policy?c) Based on a 99 percent fill rate criterion,…
You are a newsvendor selling the San Pedro Times every morning. Before you get to work, you go to the printer and buy the day’s paper for $0.25 a copy. You sell a copy of the San Pedro Times for $1.00. Daily demand is distributed normally with mean 5 250 and standard deviation 5 50. At the end of each morning, any leftover copies are worthless and they go to a recycle bin. a. How many copies of the San Pedro Times should you buy each morning? b. Based on part (a), what is the probability that you will run out of stock?
Catlea Merchandising is engaged in selling school shoesfor both boys and girls in their teenage years. Catlea needs 32,000 pairs of shoes in a year in order to satisfy the market demand. It costs ₱ 48 to place an order while ₱ 8 is needed to hold each quantity of shoe in Catlea's inventory. Upon checking on Catlea's supplier, it takes 8 days in between placing an order and eventually receiving it. a. Determine the Economic Order Quantityb. Determine the number of order per monthc. Determine the reorder point
The purchasing manager for the Pacific Steel Companymust determine a policy for ordering coal to operate 12converters. Each converter requires exactly 5 tons of coalper day to operate, and the firm operates 360 days per year.The purchasing manager has determined that the orderingcost is $80 per order, and the cost of holding coal is 20% ofthe average dollar value of inventory held. The purchasingmanager has negotiated a contract to obtain the coal for$12 per ton for the coming year.a. Determine the optimal quantity of coal to receive in eachorder.b. Determine the total inventory-related costs associatedwith the optimal ordering policy (do not include the costof the coal).c. If five days’ lead time is required to receive an order ofcoal, how much coal should be on hand when an order isplaced?
The purchasing manager for the Pacific Steel Companymust determine a policy for ordering coal to operate 12converters. Each converter requires exactly 5 tons of coalper day to operate, and the firm operates 360 days per year.The purchasing manager has determined that the orderingcost is $80 per order, and the cost of holding coal is 20% ofthe average dollar value of inventory held. The purchasingmanager has negotiated a contract to obtain the coal for$12 per ton for the coming year.a. Determine the optimal quantity of coal to receive in eachorder.b. Determine the total inventory-related costs associatedwith the optimal ordering policy (do not include the costof the coal).
ou are a newsvendor selling the San Pedro Times every morning. Before you get to work, you go to the printer and buy the day’s paper for $0.50 a copy. You sell a copy of the San Pedro Times for $1.25. Daily demand is distributed normally with mean = 335 and standard deviation = 67. At the end of each morning, any leftover copies are worthless and they go to a recycle bin. How many copies of the San Pedro Times should you buy each morning and what is the probability that you will run out of stock? Use Excel's NORM.S.INV() function to find the z value.