CC Rainger is a business to business distributor of MRO (maintain, repair and operate) products. They have
Question:
CC Rainger is a business to business distributor of MRO (maintain, repair and operate) products. They have more than 300 retail stores that they serve from a central warehouse. The company uses a 98% service level calculated on the proportion that can be satisfied directly from stock (demand fill rate). The cost for placing an order is $100 and the annual holding cost is 20%. They work 365 days/year.
| Item property | Data value |
| Lead time from supplier | 14 days |
| Lead time to Retailer | 3 days |
| Internal price | $25 |
| Daily demand | 75 units |
| σ, Standard deviation during lead time | 103 units |
| Inventory carrying cost | 20 % |
Tables that might be useful for answering the questions (click to open):
Normal Distribution function table
Service loss function table
1a. What is the Economic Order Quantity (EOQ)?
Enter the correct value in the input field. Round off to the closest 10 units.
units unanswered
1b. What Safety Stock level does the company need to reach the desired service level?
Enter the correct value in the input field. Round off to the closest 10 units.
units unanswered
1c. What Re-Order Point (ROP) level does the company need to reach the desired service level?
Enter the correct value in the input field. Round off to the closest 10 units, if needed.
Expert Answer:
Solution Daily demand Tuny 75 365 days yous womk 75x365 27375 unik Annual demand D 100 Inteaymal ... View the full answer
