Question: QUESTION 7- 15 MARKS Cocoa beans is shipped from the Ivory Coast in Africa to a chocolate manufacturer in Canada once a year. The reorder

QUESTION 7- 15 MARKS Cocoa beans is shipped from the Ivory Coast in Africa to a chocolate manufacturer in Canada once a year. The reorder point, without safety stock, is 250 kilos. The carrying cost is $20 per kilo per year, and the cost of a stock-out is $80 per kilo per year. Given the following demand probabilities during the lead time, how much safety stock should be carried? Demand during lead time (kilos) Probability 0 0.1 150 0.1 250 0.2 350 0.4 450 0.2 Given the above demand probabilities during lead time: i. how much safety stock should be carried? (10 marks) ii. Hence state the new Reorder point marks) (5

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related General Management Questions!

Mr. Dixon is the Inventory Manager for H-Pro Farm Store Ltd. He has compiled the following data on the small set of products that comprise the specialty repair parts division. Perform ABC analysis on...

QUESTION 1- INVENTORY MANAGEMENT - 25 Marks Part 1 (10 Marks) Mrs. Scale is the Inventory Manager for Honey Bun Ltd. She has compiled the following data on the small set of products that comprise the...

1. Being "normative' ethics, whether business or traditional, studies all but what construct? A. Discover conclusions about what things are good B. Discover conclusions about what actions are right...

2-9 how do you solve these questions? Use the following information to answer questions 2-9 The Toblerone (the triangular bar) chocolate is very popular worldwide. The following questions outline...

I have been tasked with answering question A.3. I have to come up with the best costing system for Dream Chocolate and explain in specific details how to go about calculating the costs of different...

Hello Sir, Could you please assist this project urgently. I have to submit it by sunday. UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K x Annual Report Pursuant to...

Please read carefully, all necessary information is attached, need to show work let me know if there is something missing. Microsoft word can be used thanks. You are Cindy, completing the analysis...

ECP001612_pcu (1).pdf X C O File | C:/Users/User/Downloads/ECP001612_pai%20(1).pdf Update E ECP001 612_pcu (1).pdf 19 / 171 69% + IND - 16 - IMD-3-0520 IN - 17 - IMD-3-0520 Production In 1987, the...

Read the Cohesion Case in Chapter 1 of the text: Nestle S.A. 2016. Prepare a case analysis. Take note that we are not going to focus on solutions or the development of new strategy, rather your task...

The Company A sells a washing machine for $2,100 per unit and the variable cost of this machine is $1,100 per unit. With fixed costs at $2,500,000. Required: What is the contribution margin per unit?...

The standard deviation, the range, and the interquartile range (IQR) summarize the variability of the data. a. Why is the standard deviation s usually preferred over the range? b. Why is the IQR...

How long does an appointment entity have to pay for renewal appointment before an adjusters appointment is canceled?

Enter a conditional statistical function in cell K14 that calculates the total number of PT employees. Use the range E6:E26 to complete the function. Enter a conditional statistical function in cell...