Production and Operations Analysis, Seventh Edition
7th Edition
ISBN: 9781478623069
Author: Steven Nahmias, Tava Lennon Olsen
Publisher: Waveland Press, Inc.
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Chapter 5, Problem 32AP
a
Summary Introduction
Interpretation: Optimal number of cans to be bought each year is to be calculated.
Concept Introduction:
The statistical mean is defined as an average used to derive the central tendency of the data.
Standard deviation is a measure of the dispersion of set data from mean.
b
Summary Introduction
Interpretation:Optimal number of cans to bought each year by using mean and standard deviation.
Concept Introduction:Control charts are used to measure the effectiveness of the process determining the average value and control limits of the process. The Upper Control Limit (UCL) is known as the larger value and the Lower Control limit (LCL) is known as the smaller value of the sample
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You are working in a food manufacturing company assigned to the Production Department. You have observed that some of the raw materials in the Warehouse are not properly utilized by the production team. These raw materials are perishable and have short shelves life. The unutilized raw materials were due to the excessive inventory purchase by the company as it failed to plan its production activity. This has also increased the spending of the company, decreasing the company's profit. As the controller, what are the actions you may implement to control the situation?
You have been asked to help a manufacturing firm that produces a variety of specialty components for local auto speed shops. The firm orders a number of components from suppliers, but the one they have asked you to analyze is special welding rod. Historical data suggests daily consumption of these rods can be modeled by a normal distribution with a mean and standard deviation of 42.3 and 5.1 bolts per day, respectively.
The rods come in boxes of 5 rods/box, and the supplier will only ship in box quantities. It takes 2 days to receive an order from the supplier. You may assume that the daily demands are independent and identically distributed, and that inventory position is always known (i.e., continuous review).
1. The current policy is the order thirty boxes from the supplier when inventory position reaches ten boxes. What is the long run fraction of stock outs associated with the current strategy?
2. Assume the cost to place an order is $5 and holding is estimated to be…
14. 12 The purchasing manager for the Atlantic Steel Company must determine a policy for
ordering coal to operate 12 converters. Each converter requires exactly 5 tons of coal per day
to operate, and the firm operates 360 days per year. The purchasing manager has determined
that the ordering cost is $80 per order and the cost of holding coal is 20% of the average dollar
value of inventory held. The purchasing manager 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 each order. (Ans: 1200 tons)
b. Determine the total inventory-related costs associated with the optimal ordering policy
(do not include the cost of the coal). (Ans: TC= $2880)
c. If 5 days of lead time are required to receive an order of coal, how much coal should be on
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Chapter 5 Solutions
Production and Operations Analysis, Seventh Edition
Ch. 5.2 - Prob. 1PCh. 5.2 - Prob. 2PCh. 5.2 - Prob. 4PCh. 5.3 - Prob. 7PCh. 5.3 - Prob. 9PCh. 5.3 - Prob. 12PCh. 5.5 - Prob. 16PCh. 5.5 - Prob. 18PCh. 5.6 - Prob. 21PCh. 5.7 - Prob. 24P
Ch. 5.7 - Prob. 25PCh. 5.7 - Prob. 26PCh. 5.7 - Prob. 27PCh. 5 - Prob. 28APCh. 5 - Prob. 31APCh. 5 - Prob. 32APCh. 5 - Prob. 33APCh. 5 - Prob. 37APCh. 5 - Prob. 38APCh. 5 - Prob. 40APCh. 5 - Prob. 41APCh. 5 - Prob. 43APCh. 5 - Prob. 44APCh. 5 - Prob. 45APCh. 5 - Prob. 46APCh. 5 - Prob. 47APCh. 5 - Prob. 48APCh. 5 - Prob. 49APCh. 5 - Prob. 50APCh. 5 - Prob. 51AP
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