Annual demand for a product is 13,000 units; weekly demand is 250 units with a standard deviation of 40 units. The cost of placing an order is $ 100, and the time from ordering to receipt is four weeks. The annual inventory carrying cost is $ 0.65 per unit. To provide a 98 percent service probability, what must the reorder point be? Suppose the production manager is told to reduce the safety stock of this item by 100 units. If this is done, what will the new service probability be?
Answer to relevant QuestionsGentle 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 ...After graduation, you decide to go into a partnership in an office supply store that has existed for a number of years. Walking through the store and stockrooms, you find a great discrepancy in service levels. Some spaces ...Demand for a book at Amazon. com is 250 units per week. The product is supplied to the retailer from a factory. The factory pays $ 10 per unit, while the total cost of a shipment from the factory to the retailer when the ...You are the operations manager for a manufacturing plant that produces pudding food products. One of your important responsibilities is to prepare an aggregate plan for the plant. This plan is an important input into the ...Should safety stock be necessary in an MRP system with dependent demand? If so, why? If not, why do firms carry it anyway?
Post your question