You manage inventory for your company and use a continuous review inventory system to control reordering items
Question:
You manage inventory for your company and use a continuous review inventory system to control reordering items for stock. Your company is open for business 300 days per year. One of your most important items experiences demand of 20 units per day, normally distributed with a standard deviation of 3 units per day. You experience a lead time on orders from your supplier of 6 days with a standard deviation of 2 days. If you order less than 1,000 units, you pay the supplier $5.00 per unit. Orders of 1,000 or more can be bought at a unit price of $4.75. Your ordering cost is $50. Your inventory carrying cost is 20%. You have established a service level policy of 97.5% on this item. What is your optimal order quantity? What is your reorder point? How much safety stock do you carry? What is your average inventory?
Step by Step Answer:
77459 775 units 79472 795 units but must order 1000 TAC of ordering ...View the full answer
Managing Operations Across the Supply Chain
ISBN: 978-0078024030
2nd edition
Authors: Morgan Swink, Steven Melnyk, Bixby Cooper, Janet Hartley
Students also viewed these Management Leadership questions
-
A population of scores is normally distributed with a standard deviation equal to 7. State whether the standard error will increase, decrease, or remain unchanged if the value of the population...
-
One of the most important differential equations in chemistry uses the Michaelis-Menton or Monod equation. Suppose S is the concentration of a substrate that is being converted into a product. Then...
-
You are the payroll accountant for your company and have been asked for information about employees and independent contractors. What are three key differences between employees and independent...
-
Read the article Problem at INSPEECH and answer the question: Why did Inspeech experience a meltdown in 1988?
-
8 2x 2 = 3x + x
-
Easecom Company is a manufacturer of videoconferencing products. Regular units are manufactured to meet marketing projections, and specialized units are made after an order is received. Maintaining...
-
Figure 2.3 displays the frequency distribution from Example 2.5. Create a similar plot using ggplot () to display the relative frequency distribution for each treatment group instead of the frequency...
-
Healthy & Trim Co. offers personal weight reduction consulting services to individuals. After all the accounts have been closed on November 30, 2008, the end of the current fiscal year, the balances...
-
4. Istanbul Municipality wants to know if a Flood Control Project is economically feasible. Annual Benefits $1,200,000; Annual Disbenefits $ 200,000; Initial Cost of the Project= $3,000,000 Annual...
-
Before you prepare the eight adjusting journal entries below in an Excel spreadsheet, please make sure corrections have been made to any previous journal entries. The following are the adjusting...
-
Dreyfus Company has a policy of counting on-hand inventory of one of its products every 45 days. When a replenishment order for the product is placed with the supplier, lead time is 8 days. Demand...
-
Suppose in problem 23, you were able to reduce your order cost to $10. What is the impact on all other variables?
-
Garza Construction Co. erects a silo (a grain storage facility) on Reeves ranch. Garza also lends Reeve funds to pay for the silo under an agreement providing that the silo is not to become part of...
-
Crane Limited is leasing a used Caterpillar excavator to Town Construction Ltd. The term of the lease is 8 years and the excavator will be owned by Town at the end of the lease if Town makes an...
-
4 5 7 8 Irish Pub Staffing Total number of servers Revenue @ $600 per server $ 2,400.00 Wages @$96.00 per server $ 384.00 Beverage Cost @ 25% $ 600.00 Revenue remaining after wages and beverage costs...
-
Telstar uses job order costing. The T-accounts below summarize its production activity for the year. Raw Materials Inventory Debit Credit 45,500 24,750 8,500 Factory Wages Payable Debit 126,500...
-
Sony manufacturers the Walkman, a mobile tape player that provides "a new way to enjoy music in high quality anywhere at any time." Sony uses a job order costing system and allocates actual...
-
Norman owns a caf. Norman's caf sells only one type of coffee. The fixed cost of the caf per month is $10,000. The selling price of each cup of coffee is $5 and the variable cost per cup of coffee is...
-
A small circular plate has a diameter of 2 cm and can be approximated as a blackbody. To determine the radiation from the plate, a radiometer is placed normal to the direction of viewing from the...
-
Carlton Stokes owns and operates a car-detailing business named SuperShine & Detailing. For $150, Carltons business will hand wash and wax customers cars, vacuum the interior, and thoroughly clean...
-
Listed below are a number of research questions and hypotheses from actual published articles. For each hypothesis, identify the independent and dependent variable. a. The use of color in a Yellow...
-
It has been suggested that SCOR might serve as an international supply chain certification tool much like ISO certification for quality. Explain how you think SCOR might be used as a certification...
-
Describe the supply chain for your university or college. Who are the suppliers, producers, and distributors in this supply chain? Are there different supplier tiers? How would you evaluate this...
-
Describe the supply chain for your university or college. Who are the suppliers, producers, and distributors in this supply chain? Are there different supplier tiers? How would you evaluate this...
-
In the Queries section of the Navigation Pane, right-click Stone Mountain Patients to select it and display the shortcut menu. 3. Click Copy on the shortcut menu. 4. Right-click the empty area near...
-
What is 'audit risk', and discuss/analyze the components of audit risk. b. List the four (4) things involved in the initial audit planning and which should be done early in the audit.
-
K Internal control is a plan of organization and a system of procedures, implemented by company. A. external auditors; management B. external auditors; board of directors OC. internal auditors;...
Study smarter with the SolutionInn App