Grasshopper Inc. manufactures tablets and is considering whether to use a common processor for its two...

 

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Grasshopper Inc. manufactures tablets and is considering whether to use a common processor for its two most popular product lines, G8S and G8X. Currently, one A5 processor is used to make one G8S tablet which has a mean demand of 328 units/day and standard deviation of 36 units/day and one A6 processor is used to make one G8X tablet which has a mean demand of 301 units/day and standard deviation of 67 units/day. Recently, Grasshopper's supplier introduced a new processor, B1 which could be integrated with both tablet designs. The replenishment lead time for all processors is 8 day(s). The annual holding cost per unit is $49 for all processors. Grasshopper reviews its inventory continuously and uses a 95% service level for the tablets and processors. Assume Grasshopper operates 364 days per year. Compute the savings in total annual holding cost if using the B1 processors • Using the B1 processor is an example of component commonality and this question gives you practice analyzing the benefits of risk pooling. • Carry all calculations to at least 3 decimal places. • Enter your final answer in dollars rounded to one decimal place (nearest tenth of a dollar). A table of z-values is provided for your reference. Service Level z value 1.282 0.9 0.91 1.341 0.92 1.405 0.93 1.476 0.94 1.555 0.95 1.645 0.96 1.751 0.97 1.881 0.98 2.054 0.99 2.326 Grasshopper Inc. manufactures tablets and is considering whether to use a common processor for its two most popular product lines, G8S and G8X. Currently, one A5 processor is used to make one G8S tablet which has a mean demand of 328 units/day and standard deviation of 36 units/day and one A6 processor is used to make one G8X tablet which has a mean demand of 301 units/day and standard deviation of 67 units/day. Recently, Grasshopper's supplier introduced a new processor, B1 which could be integrated with both tablet designs. The replenishment lead time for all processors is 8 day(s). The annual holding cost per unit is $49 for all processors. Grasshopper reviews its inventory continuously and uses a 95% service level for the tablets and processors. Assume Grasshopper operates 364 days per year. Compute the savings in total annual holding cost if using the B1 processors • Using the B1 processor is an example of component commonality and this question gives you practice analyzing the benefits of risk pooling. • Carry all calculations to at least 3 decimal places. • Enter your final answer in dollars rounded to one decimal place (nearest tenth of a dollar). A table of z-values is provided for your reference. Service Level z value 1.282 0.9 0.91 1.341 0.92 1.405 0.93 1.476 0.94 1.555 0.95 1.645 0.96 1.751 0.97 1.881 0.98 2.054 0.99 2.326

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Safety stock of A5 Z Std dev of daily demand vReplenishment lead time 164532... View the full answer