Practical Management Science
6th Edition
ISBN: 9781337406659
Author: WINSTON, Wayne L.
Publisher: Cengage,
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Inventory Management Basic EOQ
The Knight Company operates 365 days a year and uses 210 liners each day. Using a Continuous Inventory System, Knight orders 10,950 liners at a time. The orders are timed so that the new liners arrive just as inventory runs out (i.e. inventory level = 0).
- If = $1100, what is the total ordering cost for all orders in a year (Annual Ordering Cost)?
- Assume the delivery truck is unloaded instantly when it arrives. What is the maximum inventory level?
- What is the average inventory level? Hint: the company pulls liners from inventory at a constant rate.
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- Wear A Mask (WAM) uses a continuous review system and operates 52 weeks per year with the following characteristics: Demand (d) = 52,505 units/week Ordering cost (S) = $55.00/order Holding cost (H) = $2.50/unit/year ■ Lead time (L) = 3 week(s) Cycle-service level = 90%, z = 1.28 ▪ Demand is normally distributed, with a standard deviation of weekly demand of 103 units. ■ ▪ Current on-hand inventory is 1,040 units, with no scheduled receipts and no backorders. What is the optimal order quantity? (Enter your response rounded to nearest whole number.)arrow_forwardAverage daily demand (d) 80 units Standard deviation of daily demand (σd) 24 units Average lead time (LT) 6 days Standard deviation of lead time (σLT) 2 days Service level 91% 1. What is the required safety stock at a 91 percent service level? _______ units 2. What is the reorder point? _______ unitsarrow_forwardNeed in Detail (No AI)arrow_forward
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