OPERATIONS MANAGEMENT IN THE SUPPLY CHAIN: DECISIONS & CASES (Mcgraw-hill Series Operations and Decision Sciences)
7th Edition
ISBN: 9780077835439
Author: Roger G Schroeder, M. Johnny Rungtusanatham, Susan Meyer Goldstein
Publisher: McGraw-Hill Education
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Chapter 14, Problem 12P
The Suregrip Tire Company carries a certain type of tire with the following characteristics:
Average annual sales = 600 tires
Ordering cost = $40 per order
Carrying cost = 25 percent per year
Item cost = $50 per tire
Lead time = 4 days
Standard deviation of daily demand = 1 tire
- a. Calculate the EOQ.
- b. For a Q system of inventory control, calculate the safety stock required for service levels of 85, 90, 95, 97, and 99 percent.
- c. Construct a plot of total inventory investment versus service level.
- d. What service level would you establish on the basis of the graph in part c? Discuss.
For the data in problem 11:
- a. Calculate the annual turnover as a function of service level.
- b. If sales were to increase by 50 percent, what would happen to the turnover at a 95 percent service level?
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A pharmacist is trying to determine the inventory order and stock levels for a particular drug. The following information is available about the drug.
Demand (D)
85 tablets/week
Working weeks per year
52 weeks
Unit holding cost per year (H)
$6
Order cost (S)
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Standard deviation of weekly demand (sd)
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Lead time (L)
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Desired cycle service level
95%
If the pharmacist uses the continuous review (Q) system to control the inventory of the drug, what would be the order quantity and reorder point?
If the pharmacist uses the periodic review (P) system to control the inventory of the drug, what would be the review interval and target inventory level? (Hint: Use the EOQ model to derive the review interval P)
The Always Fresh Grocery Store carries a particular brand of tea that has the following characteristics:Sales = 8 cases per week Ordering cost = $10 per order Carrying charge = 20 percent per year Item cost = $80 per casea. How many cases should be ordered at a time?b. How often will tea be ordered?c. What is the annual cost of ordering and carrying tea?d. What factors might cause the firm to order a larger or smaller amount than the EOQ?
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Cost per unit
$35
Holding cost
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Average daily demand
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Ordering cost
$30 per order
Standard deviation of daily demand
3 units
Delivery lead time
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[What is the annual demand (D)?
Determine the optimal order quantity, Q*.
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Chapter 14 Solutions
OPERATIONS MANAGEMENT IN THE SUPPLY CHAIN: DECISIONS & CASES (Mcgraw-hill Series Operations and Decision Sciences)
Ch. 14.S - eXcel Suppose that for problem 1 in the chapter,...Ch. 14.S - Prob. 2PCh. 14.S - For problem 2 in the chapter, suppose the Grinell...Ch. 14.S - A producer of electronic parts wants to take...Ch. 14 - Identify the different types of inventories (raw...Ch. 14 - Why are stockout costs difficult to determine?...Ch. 14 - What is the difference between a requirements...Ch. 14 - Compare and contrast the management of finished...Ch. 14 - For a given service level, why does a P system...Ch. 14 - Under what circumstances might CPFR be useful, and...
Ch. 14 - Prob. 7DQCh. 14 - What is the appropriate role of inventory turnover...Ch. 14 - Suppose you are managing a chain of retail...Ch. 14 - The Always Fresh Grocery Store carries a...Ch. 14 - The Grinell Machine Shop makes a line of metal...Ch. 14 - The local Toyota dealer has to decide how many...Ch. 14 - Prob. 4PCh. 14 - The famous Widget Company sells widgets at the...Ch. 14 - Prob. 6PCh. 14 - Prob. 7PCh. 14 - An electronics retailer carries a particular...Ch. 14 - An electronics retailer carries a particular...Ch. 14 - The local Toyota dealer has to decide how many...Ch. 14 - The Suregrip Tire Company carries a certain type...Ch. 14 - The Suregrip Tire Company carries a certain type...Ch. 14 - eXcel 13. The Cover-up Drapery Company carries...Ch. 14 - Suppose you are the supplier of the Cover-up...
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