1. HEB has started selling a new brand of Monster Energy Drink: Monster MIXXD. Because this...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
1. HEB has started selling a new brand of Monster Energy Drink: Monster MIXXD. Because this energy drink is new to the product line, HEB has been ordering the product in large bulk quantities so that they can deal with any demand they might face for this product. Now that the product has been around for a while, HEB is starting to take a more active role in managing the inventory for the product. Using the following table, please answer the questions below. (Total 15 Points) Variable Demand Lead Time Holding Cost Ordering Cost Price Operating Days Mean 500 cans per week 3 days 20% of item value per unit per year $2.50 per order $0.20 per can 365 days per year a. What is the Economic Order Quantity in this scenario? (2 Points) b. If demand and lead time are constant, please find the number of orders, the expected time between orders, the reorder point, and the cost of managing inventory for the EOQ. (5 Points) c. Using a service level of 95%, If the variance of daily demand is 15 cans per day and the variance of lead time is 1 day, what should the reorder point be for this product? (3 Points) d. Say that the manager of HEB does not want to order the amount specified in the Economic Order Quantity, and instead decides to order 5,000 units every time they place and order. In this scenario, please find the expected time between orders, the reorder point (with constant demand and lead time, same as part B), and the cost of managing inventory. Which cost is higher than in part B: total holding costs or total ordering costs? Why do you think this is the case? (5 Points) 1. HEB has started selling a new brand of Monster Energy Drink: Monster MIXXD. Because this energy drink is new to the product line, HEB has been ordering the product in large bulk quantities so that they can deal with any demand they might face for this product. Now that the product has been around for a while, HEB is starting to take a more active role in managing the inventory for the product. Using the following table, please answer the questions below. (Total 15 Points) Variable Demand Lead Time Holding Cost Ordering Cost Price Operating Days Mean 500 cans per week 3 days 20% of item value per unit per year $2.50 per order $0.20 per can 365 days per year a. What is the Economic Order Quantity in this scenario? (2 Points) b. If demand and lead time are constant, please find the number of orders, the expected time between orders, the reorder point, and the cost of managing inventory for the EOQ. (5 Points) c. Using a service level of 95%, If the variance of daily demand is 15 cans per day and the variance of lead time is 1 day, what should the reorder point be for this product? (3 Points) d. Say that the manager of HEB does not want to order the amount specified in the Economic Order Quantity, and instead decides to order 5,000 units every time they place and order. In this scenario, please find the expected time between orders, the reorder point (with constant demand and lead time, same as part B), and the cost of managing inventory. Which cost is higher than in part B: total holding costs or total ordering costs? Why do you think this is the case? (5 Points)
Expert Answer:
Related Book For
Posted Date:
Students also viewed these general management questions
-
The following data represent the responses to two questions asked in a survey of 40 college students majoring in business: What is your gender? (M = male; F = female) and What is your major? (A =...
-
3. A hockey player has a mass of 115 kg. He is skating at a constant speed. He needs to exert a force of 13.3 N to maintain his constant speed. a) Name the type of friction involved in this case. (1)...
-
1. How strong are the competitive forces confronting J. Crew in the market for specialty retail? Do a [Michael Porter] five-forces analysis to support your answer. (see chapter 3 in the textfor...
-
Compare the hoop stress (r,/2) predictions from elasticity with voids given by relation (15.5.18) with the corresponding results from classical theory. Choosing N = 1/2 and L = 2, for the elastic...
-
Relevance is accomplished in part by applying the periodicity concept. Do you agree with this statement? Explain.
-
The commercial banks in the financial district are to be surveyed. Some of them are very large, with assets of more than $500 million; others are medium-sized, with assets between $100 million and...
-
Identify the types of interests that are created in the following situations. If the interest is an overriding royalty or a production payment interest, also state whether it is a retained or...
-
Crafty Paint prepares and packages paint products. Crafty Paint has two departments: Blending and Packaging. Direct materials are added at the beginning of the blending process (dyes) and at the end...
-
Find tan if csc u = -6.882 and u is in Quadrant-III. 2 tan = 2 Your answer should be accurate to 4 decimal places.
-
1. Based on prior experience, GBI estimates that approximately % of the net credit sales (gross credit sales minus returns of credit sales) for the month will become bad debt. GBI writes off bad...
-
Describe the SAN (storage area network) technology, how it differs from the static fixed data center and cloud. What are its advantages over static data centers? What is the main challenge facing...
-
A pair of involute profile spur gears is to give a speed ratio of 3. The arc of approach is not to be less than the circular pitch. The pressure angle is \(20^{\circ}\) and pinion is the driver. The...
-
An audit committee should do all of the following except a. Recommend the retention or dismissal of the outside auditors. b. Determine whether material financial fraud ought to be reported in a...
-
What factors determine the reliability of audit evidence? Give an example of two types of evidence, one that is more reliable and one that is less reliable.
-
A pinion having 30 teeth drives a gear of 80 teeth. The profile of gears is involute with \(20^{\circ}\) pressure angle, \(12 \mathrm{~mm}\) module, and \(10 \mathrm{~mm}\) addendum. Find (a) the...
-
Why are assurance services needed? What are the three primary drivers of the need for assurance services?
-
An example of the reward (outcome) behavior change technique is when... An individual receives a $20 gift card if they participate in three height and weight measurements. A worker receives a day off...
-
What do you think?
-
4/7 8/3 Perform the indicated operation by hand.
-
Congressional pay in 2000 was $141.3 thousand, and it increased by approximately $3.6 thousand per year for the period 20002009. a. Complete Table 31 to help find an expression that stands for the...
-
A racquetball is dropped from various heights, and the bounce height is recorded each time (see Table 40). Let f(x) be the bounce height (in inches) of the racquetball after it is dropped from an...
-
How can external annual financial accounting statements be used by managers within an organisation?
-
Explain the main purpose of the income statement, cash flow statement and the statement of financial position.
-
What are the benefits of having international financial report standards?
Study smarter with the SolutionInn App