A part of the manufacturing process in the textile industry is cloth sizing and dyeing. That...

 

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A part of the manufacturing process in the textile industry is cloth sizing and dyeing. That is where the technical qualities of the cloth and its color are set. A textile sizing and dyeing plant use a continuous review system (Q, R) to manage its dye inventory. The ordering cost is $200, and a gallon of purple dye costs $5.00. Annual inventory holding cost is estimated at 20 percent. Expected annual demand is 10,000 gallons, and lead-time demand is normally distributed with N(400, 900) (mean, variance) 1. Find the lead time t (years) 2. Find the reorder point for a cycle service level of 90 percent and the resulting safety stock. 3. Because of delivery convenience, Q is set as 1000 gallons. Find R for the minimum expected cost if the shortage is estimated at $4.00 per gallon. A part of the manufacturing process in the textile industry is cloth sizing and dyeing. That is where the technical qualities of the cloth and its color are set. A textile sizing and dyeing plant use a continuous review system (Q, R) to manage its dye inventory. The ordering cost is $200, and a gallon of purple dye costs $5.00. Annual inventory holding cost is estimated at 20 percent. Expected annual demand is 10,000 gallons, and lead-time demand is normally distributed with N(400, 900) (mean, variance) 1. Find the lead time t (years) 2. Find the reorder point for a cycle service level of 90 percent and the resulting safety stock. 3. Because of delivery convenience, Q is set as 1000 gallons. Find R for the minimum expected cost if the shortage is estimated at $4.00 per gallon.

Answer rating: 100% (QA)

SOLUTION 1 To find the lead time t in years we need to convert the mean and variance of the leadtime demand from gallons to years We know that the exp... View the full answer