Jubail Frozen Chicken sells frozen chicken to supermarkets and stores around the Kingdom. Demand for the...

 

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Jubail Frozen Chicken sells frozen chicken to supermarkets and stores around the Kingdom. Demand for the frozen chicken is expected around 500,000 chickens per year and it has a production capacity of 750,000 per year. The cost of one piece of chicken is SAR 10. The holding cost is based on a 20% annual rate. The production setup costs are SAR 500 per setup. The company is working for 240 working days in a year and the lead time for a production run is 10 day. Use the production lot size model to compute the following values: a. Minimum cost production lot size b. Number of production runs per year c. Cycle time d. Length of a production run e. Maximum inventory level f. Average inventory level g. Annual ordering cost h. Annual inventory cost i. Total annual cost j. Reorder point Question # 4. (2 Marks) A food truck company wants to order a specialty coffee bean for the next three-month demand. Certainly, the food truck company does not want to cary the coffee beans for more than three months, since the taste of the coffee beans will change. The coffee beans will cost the company SAR 60 per kg to purchase. But the company can generate a revenue of SAR 150 per kg of coffee beans purchased. After three months, the coffee beans can be sold to small shops at SAR 40 per kg. Based on previous experiences, the demand for coffee beans can reach up to u = 180 kg with standard deviation o = 10 kg. a. What is the recommended order quantity? b. What is the probability that the company will sell all coffee beans purchased? ANSWER: Jubail Frozen Chicken sells frozen chicken to supermarkets and stores around the Kingdom. Demand for the frozen chicken is expected around 500,000 chickens per year and it has a production capacity of 750,000 per year. The cost of one piece of chicken is SAR 10. The holding cost is based on a 20% annual rate. The production setup costs are SAR 500 per setup. The company is working for 240 working days in a year and the lead time for a production run is 10 day. Use the production lot size model to compute the following values: a. Minimum cost production lot size b. Number of production runs per year c. Cycle time d. Length of a production run e. Maximum inventory level f. Average inventory level g. Annual ordering cost h. Annual inventory cost i. Total annual cost j. Reorder point Question # 4. (2 Marks) A food truck company wants to order a specialty coffee bean for the next three-month demand. Certainly, the food truck company does not want to cary the coffee beans for more than three months, since the taste of the coffee beans will change. The coffee beans will cost the company SAR 60 per kg to purchase. But the company can generate a revenue of SAR 150 per kg of coffee beans purchased. After three months, the coffee beans can be sold to small shops at SAR 40 per kg. Based on previous experiences, the demand for coffee beans can reach up to u = 180 kg with standard deviation o = 10 kg. a. What is the recommended order quantity? b. What is the probability that the company will sell all coffee beans purchased? ANSWER:

Answer rating: 100% (QA)

Annual demand D 500000 Production rate P 750000 Unit cost c 10 Holding cost H 1020 2 Setup cost S 50... View the full answer