Operations Management: Processes and Supply Chains (12th Edition) (What's New in Operations Management)
12th Edition
ISBN: 9780134741062
Author: Lee J. Krajewski, Manoj K. Malhotra, Larry P. Ritzman
Publisher: PEARSON
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Chapter 9, Problem 31P
Wood County Hospital consumes 1,000 boxes of bandages per week. The price of bandages is $35 per box, and the hospital operates 52 weeks per year. The cost of processing an order is $15, and the cost of holding one box for a year is 15 percent of the value of the material.
- The hospital orders bandages in lot sizes of 900 boxes. What extra cost does the hospital incur, which it could save by using the EOQ method?
- Demand is
normally distributed , with a standard deviation of weekly demand of 100 boxes. The lead time is 2 weeks. What safety stock is necessary if the hospital uses a continuous review system and a 97 percent cycle-service level is desired? What should be the reorder point? - If the hospital uses a periodic review system, with
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Wood County Hospital consumes 1,000 boxes of bandages per week. The price of bandages is $36 per box, and the hospital operates 52 weeks per year. The cost of processing an order is $12, and the cost of holding one box for a year is 20 percent of the value of the material.
a. The hospital orders bandages in lot sizes of 700 boxes. What extra cost does the hospital incur, which it could save by using the EOQ method? (Enter your response rounded to two decimal places.)
b. Demand is normally distributed, with a standard deviation of weekly demand of 100 boxes. The lead time is 3 weeks. Refer to the standard normal table for z-values. What safety stock is necessary if the hospital uses a continuous review system and a 95 percent cycle-service level is desired? (Enter your response rounded to the nearest whole number.)
Wood County Hospital consumes 1,500 boxes of bandages per week. The price of bandages is $36 per box, and the hospital operates
52 weeks per year. The cost of processing an order is $15, and the cost of holding one box for a year is 20 percent of the value of the
material.
a. The hospital orders bandages in lot sizes of 900 boxes. What extra cost does the hospital incur, which it could save by using the
EOQ method? $ 435.37 (Enter your response rounded to two decimal places.)
b. Demand is normally distributed, with a standard deviation of weekly demand of 150 boxes. The lead time is 2 weeks. Refer to the
standard normal table for z-values.
What safety stock is necessary if the hospital uses a continuous review system and a 95 percent cycle-service level is desired? 348
boxes. (Enter your response rounded to the nearest whole number.)
What should be the reorder point? boxes. (Enter your response rounded to the nearest whole number.)
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Wood County Hospital consumes 500 boxes of bandages per week. The price of bandages is $70 per box. The cost of processing an order is $60, and the cost of holding one box for a year is 15% of the value of the material. Assume 52 weeks per year.
a) The hospital orders bandages in lot sizes of 900 boxes. What extra costs does the hospital incur, which it could save by applying the EOQ concept?
b) Demand is normally distributed with a standard deviation of weekly demand being 100 boxes. The lead-time is 1/2 week. What safety stock is necessary if the hospital uses continuous review inventory system, and a 97% service level? What should the reorder point be?
Chapter 9 Solutions
Operations Management: Processes and Supply Chains (12th Edition) (What's New in Operations Management)
Ch. 9 - What is the relationship between inventory and the...Ch. 9 - Suppose that a large discount retailer with a lot...Ch. 9 - Will organizations ever get to the point where...Ch. 9 - A part is produced in lots of 1,000 units. It is...Ch. 9 - Prince Electronics, a manufacturer of consumer...Ch. 9 - Terminator, Inc. manufactures a motorcycle part in...Ch. 9 - Ruby-Star Incorporated is considering two...Ch. 9 - Haley Photocopying purchases paper from an...Ch. 9 - Prob. 6PCh. 9 - Southern Markets, Inc. is considering the use of...
Ch. 9 - New Wave Shelving’s inventory manager would like...Ch. 9 - Yellow Press, Inc. buys paper in 1,500-pound rolls...Ch. 9 - Babble, Inc. buys 400 blank cassette tapes per...Ch. 9 - At Dot Com, a large retailer of popular books,...Ch. 9 - Leaky Pipe, a local retailer of plumbing supplies,...Ch. 9 - Sam’s Cat Hotel operates 52 weeks per year, 6...Ch. 9 - Consider again the kitty litter ordering policy...Ch. 9 - In a Q system, the demand rate for strawberry ice...Ch. 9 - Petromax Enterprises uses a continuous review...Ch. 9 - In a continuous review inventory system, the lead...Ch. 9 - In a two-bin inventory system, the demand for...Ch. 9 - You are in charge of inventory control of a highly...Ch. 9 - Your firm uses a continuous review system and...Ch. 9 - A company begins a review of ordering policies for...Ch. 9 - Prob. 22PCh. 9 - The Farmer’s Wife is a country store...Ch. 9 - Prob. 24PCh. 9 - Prob. 25PCh. 9 - Prob. 26PCh. 9 - In a P system, the lead time for a box of...Ch. 9 - Suppose that Sam’s Cat Hotel in Problem 13 uses...Ch. 9 - Your firm uses a periodic review system for all...Ch. 9 - Using the same information as in Problem 21,...Ch. 9 - Wood County Hospital consumes 1,000 boxes of...Ch. 9 - A golf specialty wholesaler operates 50 weeks per...Ch. 9 - What is the EOQ and what is the lowest total cost?Ch. 9 - What is the annual cost of holding inventory at...Ch. 9 - Prob. 3AMECh. 9 - Prob. 4AMECh. 9 - Prob. 5AMECh. 9 - Prob. 6AMECh. 9 - Comment on the sensitivity of the EOQ model to...Ch. 9 - Consider the pressures for small versus large...Ch. 9 - Prob. 2VCCh. 9 - The Marker Maker© product recently experienced an...Ch. 9 - Put yourself in Sue McCaskey’s position and...Ch. 9 - By how much do your recommendations for these two...
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- Maroons Medical Supplies, Inc. must order masks from its supplier in lots of 1 dozen boxes. Given the information provided below, complete the following table: Annual demand 26,000 dozen Cost per order placed P30 Carrying cost 20% Price per dozen P7.80 Order Size (Dozen) 250 500 1,000 2,000 13,000 26,000 Number of orders Average inventory Carrying cost Order cost Total cost 1. What is the EOQ? Thank you so much!arrow_forwardWood County Hospital consumes 1,000 boxes of bandages per week. The price of bandages is $35 per box, and the hospital operates 52 weeks per year. The cost of processing an order is $15, and the cost of holding one box for a year is 15 percent of the value of the material.a. The hospital orders bandages in lot sizes of 900 boxes. What extra cost does the hospital incur, which it could save by using the EOQ method?b. Demand is normally distributed, with a standard deviation of weekly demand of 100 boxes. The lead time is 2 weeks. What safety stock is necessary if the hospital uses a continuous review system and a 97 percent cycle-service level is desired? What should be the reorder point?c. If the hospital uses a periodic review system, with P = 2 weeks, what should be the target inventory level, T?arrow_forwardWood County Hospital consumes 1,000 boxes of bandagesper week. The price of bandages is $35 per box, and thehospital operates 52 weeks per year. The cost of processingan order is $15, and the cost of holding one box for a year is15 percent of the value of the material.a. The hospital orders bandages in lot sizes of 900 boxes.What extra cost does the hospital incur, which it couldsave by using the EOQ method?b. Demand is normally distributed, with a standard devia-tion of weekly demand of 100 boxes. The lead time is2 weeks. What safety stock is necessary if the hospital usesa continuous review system and a 97 percent cycle-servicelevel is desired? What should be the reorder point?c. If the hospital uses a periodic review system, with P = 2weeks, what should be the target inventory level, T?arrow_forward
- What is the cycle service level for a company that has a re-order point of 400, an average weekly demand of 100, a weekly demand standard deviation of 20, and a lead time of 5 weeks?arrow_forwardA company is targeting a cycle service level of 25%. What should their reorder point be if they have an average weekly demand of 100, a weekly demand standard deviation of 20, and a lead time of 5 weeks?arrow_forwardWear 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_forward
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