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W2.A1.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

, Standard deviation during lead time 103 units

Inventory carrying cost 20 %

Safety factor

0,00 50,0% 0,72 76,4% 1,44 92,5% 2,16 98,5% 0,02 50,8% 0,74 77,0% 1,46 92,8% 2,18 98,5% 0,04 51,6%

0,76 77,6% 1,48 93,1% 2,20 98,6% 0,06 52,4% 0,78 78,2% 1,50 93,3% 2,22 98,7% 0,08 53,2% 0,80 78,8%

1,52 93,6% 2,24 98,7% 0,10 54,0% 0,82 79,4% 1,54 93,8% 2,26 98,8% 0,12 54,8% 0,84 80,0% 1,56 94,1%

2,28 98,9% 0,14 55,6% 0,86 80,5% 1,58 94,3% 2,30 98,9% 0,16 56,4% 0,88 81,1% 1,60 94,5% 2,32 99,0%

0,18 57,1% 0,90 81,6% 1,62 94,7% 2,34 99,0% 0,20 57,9% 0,92 82,1% 1,64 94,9% 2,36 99,1% 0,22 58,7%

0,94 82,6% 1,66 95,2% 2,38 99,1% 0,24 59,5% 0,96 83,1% 1,68 95,4% 2,40 99,2% 0,26 60,3% 0,98 83,6%

1,70 95,5% 2,42 99,2% 0,28 61,0% 1,00 84,1% 1,72 95,7% 2,44 99,3% 0,30 61,8% 1,02 84,6% 1,74 95,9%

2,46 99,3% 0,32 62,6% 1,04 85,1% 1,76 96,1% 2,48 99,3% 0,34 63,3% 1,06 85,5% 1,78 96,2% 2,50 99,4%

0,36 64,1% 1,08 86,0% 1,80 96,4% 2,52 99,4% 0,38 64,8% 1,10 86,4% 1,82 96,6% 2,54 99,4% 0,40 65,5%

1,12 86,9% 1,84 96,7% 2,56 99,5% 0,42 66,3% 1,14 87,3% 1,86 96,9% 2,58 99,5% 0,44 67,0% 1,16 87,7%

1,88 97,0% 2,60 99,5% 0,46 67,7% 1,18 88,1% 1,90 97,1% 2,62 99,6% 0,48 68,4% 1,20 88,5% 1,92 97,3%

2,64 99,6% 0,50 69,1% 1,22 88,9% 1,94 97,4% 2,66 99,6% 0,52 69,8% 1,24 89,3% 1,96 97,5% 2,68 99,6%

0,54 70,5% 1,26 89,6% 1,98 97,6% 2,70 99,7% 0,56 71,2% 1,28 90,0% 2,00 97,7% 2,72 99,7% 0,58 71,9%

1,30 90,3% 2,02 97,8% 2,74 99,7% 0,60 72,6% 1,32 90,7% 2,04 97,9% 2,76 99,7% 0,62 73,2% 1,34 91,0%

2,06 98,0% 2,78 99,7% 0,64 73,9% 1,36 91,3% 2,08 98,1% 2,80 99,7% 0,66 74,5% 1,38 91,6% 2,10 98,2%

2,82 99,8% 0,68 75,2% 1,40 91,9% 2,12 98,3% 2,84 99,8% 0,70 75,8% 1,42 92,2% 2,14 98,4% 2,86 99,8%

Safety factor

0,00 0,3989 0,72 0,1381 1,44 0,0336 2,16 0,0055

0,02 0,3890 0,74 0,1334 1,46 0,0321 2,18 0,0052

0,04 0,3793 0,76 0,1289 1,48 0,0307 2,20 0,0049

0,06 0,3697 0,78 0,1245 1,50 0,0293 2,22 0,0046

0,08 0,3602 0,80 0,1202 1,52 0,0280 2,24 0,0044

0,10 0,3509 0,82 0,1160 1,54 0,0267 2,26 0,0041

0,12 0,3418 0,84 0,1120 1,56 0,0255 2,28 0,0039

0,14 0,3328 0,86 0,1080 1,58 0,0244 2,30 0,0037

0,16 0,3240 0,88 0,1042 1,60 0,0232 2,32 0,0035

0,18 0,3154 0,90 0,1004 1,62 0,0222 2,34 0,0033

0,20 0,3069 0,92 0,0968 1,64 0,0211 2,36 0,0031

0,22 0,2986 0,94 0,0933 1,66 0,0201 2,38 0,0029

0,24 0,2904 0,96 0,0899 1,68 0,0192 2,40 0,0027

0,26 0,2824 0,98 0,0865 1,70 0,0183 2,42 0,0026

0,28 0,2745 1,00 0,0833 1,72 0,0174 2,44 0,0024

0,30 0,2668 1,02 0,0802 1,74 0,0166 2,46 0,0023

0,32 0,2592 1,04 0,0772 1,76 0,0158 2,48 0,0021

0,34 0,2518 1,06 0,0742 1,78 0,0150 2,50 0,0020

0,36 0,2445 1,08 0,0714 1,80 0,0143 2,52 0,0019

0,38 0,2374 1,10 0,0686 1,82 0,0136 2,54 0,0018

0,40 0,2304 1,12 0,0659 1,84 0,0129 2,56 0,0017

0,42 0,2236 1,14 0,0634 1,86 0,0123 2,58 0,0016

0,44 0,2169 1,16 0,0609 1,88 0,0116 2,60 0,0015

0,46 0,2104 1,18 0,0584 1,90 0,0111 2,62 0,0014

0,48 0,2040 1,20 0,0561 1,92 0,0105 2,64 0,0013

0,50 0,1978 1,22 0,0538 1,94 0,0100 2,66 0,0012

0,52 0,1917 1,24 0,0517 1,96 0,0094 2,68 0,0011

0,54 0,1857 1,26 0,0495 1,98 0,0090 2,70 0,0011

0,56 0,1799 1,28 0,0475 2,00 0,0085 2,72 0,0010

0,58 0,1742 1,30 0,0455 2,02 0,0080 2,74 0,0009

0,60 0,1687 1,32 0,0436 2,04 0,0076 2,76 0,0009

0,62 0,1633 1,34 0,0418 2,06 0,0072 2,78 0,0008

0,64 0,1580 1,36 0,0400 2,08 0,0068 2,80 0,0008

0,66 0,1528 1,38 0,0383 2,10 0,0065 2,82 0,0007

0,68 0,1478 1,40 0,0367 2,12 0,0061 2,84 0,0007

0,70 0,1429 1,42 0,0351 2,14 0,0058 2,86 0,0006

1a.What is the Economic Order Quantity (EOQ)?

Enter the correct value in the input field. Round off to the closest 10 units._____units

1b.What Safety Stock level does the company need to reach the desired service level? ____ units

1c.What Re-Order Point (ROP) level does the company need to reach the desired service level? _____units

W2.A2. Athens Inc.

0.0/4.0 puntos (calificado)

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Athens Inc. are using a purchased component in their own assembly. The production runs 52 weeks/year and the consumption of the component is evenly distributed over the year. The purchase price is $23. The inventory carrying cost is 20%. The administrative cost for each purchase is $85. The component can only be purchased in regular tens (i.e. 10, 20, 30, 40 et c).

The demand is as follows:

Week 1 2 3 4 5 6 7 8 9 10 11 12

Demand (pieces) 19 24 21 18 23 14 31 19 21 20 21 21

1a.Athens Inc. want to calculate the Economic Order Quantity. How much shall they order each time, assume that the 12 weeks of demand above is representative for the full year.

Calculate the Economic Order Quantity (EOQ).--------pieces

1b.Athens Inc. are using their ERP systems material planning function for determining when orders to the supplier of the component shall be released. Assume that the safety stock level is 20 pieces and there are 100 pieces available in stock when production in week 1 starts. The lead time is 2 weeks from the supplier of the component.

In which week should the first order to the supplier of the component be released? ___week number