Question: Ross White's machine shop uses 2,500 brackets during the course of a year, and this usage is relatively constant throughout the year. These brackets are

Ross White's machine shop uses 2,500 brackets
Ross White's machine shop uses 2,500 brackets during the course of a year, and this usage is relatively constant throughout the year. These brackets are purchased from a supplier 100 miles away for $15 each, and the lead time is 2 days. The holding cost per bracket per year is $1.50 (or 10% of the unit cost) and the ordering cost per order is $18.75. There are 250 working days per year. recognizes that although he knows that lead time is 2 days and demand per day averages 10 units, the demand during the lead time often varies. Ross has kept very good records and has determined lead time demand is normally distributed with a standard deviation of 1.5 units. Assume this company always order 250 units each time an order is placed. (a). What Z value would be appropriate for a 98% service level? Use the normal distribution table. (b). What safety stock should Ross maintain if he wants a 98% service level. (c). What is the adjusted ROP for the brackets. (d). What is the annual inventory holding cost including safety stock if the annual holding cost per unit is $1.50

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