Safari Bar and Restaurant uses 5,000 quart bottles of an imported wine each year. The effervescent wine costs $5 per bottle and is served in whole bottles only since it loses its bubbles quickly. The manager figures that it costs $10 each time an order is placed, and holding costs are 30 percent of the purchase price per bottle per year. It takes four weeks for an order to arrive. Weekly demand has a Normal distribution with an average of 100 bottles and a standard deviation of 30 bottles. Safari Bar and Restaurant closes two weeks per year. The manager would like to use an inventory system that minimizes inventory cost and will satisfy 90 percent of his customers who order this wine. Round your answers to the nearest integer. What is the economic order quantity for the manager to order? OA. 258 bottles OB. 500 bottles OC. 316 bottles O D. 408 bottles What is the expected demand during lead-time? OA. 200 bottles OB. 400 bottles OC. 300 bottles OD. 100 bottles

Safari Bar and Restaurant uses 5,000 quart bottles of an imported wine each year. The effervescent wine costs $5 per bottle and is served in whole bottles only since it loses its bubbles quickly. The manager figures that it costs $10 each time an order is placed, and holding costs are 30 percent of the purchase price per bottle per year. It takes four weeks for an order to arrive. Weekly demand has a Normal distribution with an average of 100 bottles and a standard deviation of 30 bottles. Safari Bar and Restaurant closes two weeks per year. The manager would like to use an inventory system that minimizes inventory cost and will satisfy 90 percent of his customers who order this wine. Round your answers to the nearest integer. What is the economic order quantity for the manager to order? OA. 258 bottles OB. 500 bottles OC. 316 bottles O D. 408 bottles What is the expected demand during lead-time? OA. 200 bottles OB. 400 bottles OC. 300 bottles OD. 100 bottles

Purchasing and Supply Chain Management

6th Edition

ISBN:9781285869681

Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Chapter16: Lean Supply Chain Management

Section: Chapter Questions

Problem 10DQ: The chapter presented various approaches for the control of inventory investment. Discuss three...

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40) PLEASE HELP WITH THIS! Gentle Ben's Bar and Restaurant uses 5,000 quart bottles of an imported wine each year. The effervescent wine costs $3 per bottle and Is served only in whole bottles because it loses its bubbles quickly. Ben figures that it costs $10 each time an order is placed, and holding costs are 20 percent of the purchase price. It takes three weeks for an order to arrive. Weekly demand is 100 bottles (closed two weeks per year) with a standard devlation of 30 bottles. Ben would like to use an inventory system that minimizes inventory cost and will provide a 95 percent service probability. b. At what inventory level should he place an order? Note: Use Excel's NORM.S.IN( function to find the z value. Round z value to 2 decimal places and final answer to the nearest whole number.
Sam's Pet Hotel operates 52 weeks per year, 6 days per week, and uses a continuous review inventory system. It purchases kitty litter for $13.00 per bag. The following information is available about these bags: ≻Demand=75 bags/week ≻Order cost=$55.00/order ≻Annual holding cost=25 percent of cost ≻Desired cycle-service level=80 percent ≻Lead time=4 weeks (24 working days) ≻Standard deviation of weekly demand=15 bags ≻Current on-hand inventory is 320 bags, with no open orders or backorders. Part 2 a. Suppose that the weekly demand forecast of 75 bags is incorrect and actual demand averages only 50 bags per week. How much higher will total costs be, owing to the distorted EOQ caused by this forecast error? The costs will be $enter your response here higher owing to the error in EOQ. (Enter your response rounded to two decimal places.) a. What is the EOQ? What would the average time between orders (in weeks)? b. What should R be? c. An inventory withdraw…
All Seasons Flower Shop uses 870 clay pots a month. The pots are purchased at $ 6 each. Annual holding cost per pot is estimated to be 35% of purchase cost. Ordering cost is $ 40 per order. The shop operates 12 months in a year. What is the economic order quantity (EOQ)?
Pet Empire operates 52 weeks per year, 6 days per week, and uses a continuous review inventory system. It purchases kitty litter for $11.70 per bag. The following information is available about these bags. Demand is 90 bags per week, order cost is $54 per order, annual holding cost is 27% of the cost, service level is 80%, lead time is 3 weeks (18 working days), and standard deviation of weekly demand is 15 bags. Current on hand inventory is 320 bags with no open orders or back orders. Require to calculate Economic Order Quantity (EOQ). What would be the average time between orders (in weeks)? Calculate reorder point (R). The store currently uses a lot size of 500 bags (i.e., Q = 500). Calculate the annual holding cost of this policy and also annual ordering cost. Without calculating the EOQ, how can you conclude from these two calculation that the current lot size is too large? What would be the annual cost saved by shifting from the 500-bag lot size to the EOQ? Consider again the…
1) Weekly demand for a product is 300 units with a standard deviation of 35 units. The cost of placing an order is $80, and the time from ordering to receipt is three weeks. The annual inventory carrying cost is $1 per unit. (Company operates for 52 weeks) a) How many units should the production manager order each time? (Round up your answer) b) What is the re-order point if the manager wants to provide a 97.5 percent service probability? (Roundup your answer) c) Suppose the production manager is told to reduce the safety stock of this item by 50 units. If this is done, what will the new service probability be? What is the Z value, and what is the probability?
Weekly Average Demand 110 Standard deviation of (weekly) demand 30 Setup cost ($) 1400 Lead time (in weeks) 2 Procurement cost ($) 200 Holding cost /unit/week ($) 3 You are given the demand and inventory related information about a grocery store’s product in the table. The store is open for 46 weeks in a year. What is the reorder point if it wants to achieve a service level of 97%? (Do not round your intermediate calculations. Round your final answers to the nearest whole number.
Sam's Cat Hotel operates 50 weeks per year, 6 days per week, and uses a continuous review inventory system. It purchases kitty litter for $12.00 per bag. The following information is available about these bags: > Demand = 95 bags/week > Order cost = $50.00/order > Annual holding cost = 20 percent of cost > Desired cycle-service level = 80 percent > Lead time =5 weeks (30 working days) > Standard deviation of weekly demand = 15 bags > Current on-hand inventory is 320 bags, with no open orders or backorders. a. Suppose that the weekly demand forecast of 95 bags is incorrect and actual demand averages only 75 bags per week. How much higher will total costs be, owing to the distorted EOQ caused by this forecast error? The costs will be $ higher owing to the error in EOQ. (Enter your response rounded to two decimal places.)
Daily demand for product sample kits is normally distributed with a mean of 35 units and a standard deviation of 4. Supply is virtually certain with a lead time of 9 days. The cost of placing an order is $20, and annual carrying costs for one kit is 25 percent. The price of one kit is $12.50. Assume a year has 365 days.If a 99% service level is desired, what is average inventory on hand? If demand had no variation, what would the reorder point be?
The Big Buy Supermarket stocks Munchies Cereal. Demand for Munchies is 4,000 boxes peryear (365 days). It costs the store $60 per order of Munchies, and it costs $0.80 per box per yearto keep the cereal in stock. Once an order for Munchies is placed, it takes 4 days to receive theorder from a food distributor. Determine The reorder point
Kabel Market store sells electric cable. The demand for cable is normally distributed. The inventory related information at Kabel Market is as follows: Average Annual Demand = 16,900 meters Standard deviation of weekly demand = 28 meters Cable selling price = AMD 640.00 per meter Ordering cost = AMD 1,250.00 per order Lead time = 5 weeks Annual inventory-holding cost estimate = 2.5% of the cable selling price Required service level = 95% Kabel Market works 52 weeks a year. Note: The approximate z values are: for 0.9 ≈ 1.28, for 0.92 ≈ 1.405, for 0.95 ≈ 1.645, for 0.98 ≈ 2.05. Suppose the bar management practices the fixed-QUANTITY ordering system with the use of the economic order quantity. Answer the following questions: (i) How many meters of cable they order from the supplier each time? (ii) When do they place an order? (iii) What is the safety stock?
I need answers A company uses on an average 216 parts a day with a standard deviation of 16 parts per day in a manufacturing process. Cost of placing and receiving an ordering is BDT 40,000. Estimated monthly carrying cost is BDT 90 per part. Orders are delivered approximately 7 days after being placed. The delivery time is normal with a mean of 7 days and a standard deviation of 2 days. The company is open 360 days per year. Find the order quantity that is economical. If the Company takes 3% stock out risk, then find safety stock (SS) quantity and Re-Order Point? 3.If the supplier offers a discount of BDT 8 per circuit board for purchasing of 4000 boards at a time, then financially evaluate and justify whether the company will go with the offer or not? 4.The person who orders the boards follows this rule: Order when the amount on…
Charlie's Pizza orders all of its pepperoni, olives, anchovies, and mozzarella cheese to be shipped directly from Italy. An American distributor stops by every four weeks to take orders. Because the orders are shipped directly from Italy, they take three weeks to arrive. Charlie's Pizza uses an average of 150 pounds of pepperoni each week, with a standard deviation of 30 pounds. Charlie's prides itself on offering only the best-quality ingredients and a high level of service, so it wants to ensure a 98 percent probability of not stocking out on pepperoni. Assume that the sales representative just walked in the door and there are currently 500 pounds of pepperoni in the walk-in cooler. How many pounds of pepperoni would you order? Note: Use Excel's NORM.S.INV() function to find the z value. Do not round intermediate calculations. Round z value to 2 decimal places and final answer to the nearest whole number.