Question: SOLVE A AND B (15) A product has an average weekly demand of 75 with an EOQ of 305 . The lead time is 2

SOLVE A AND B (15) A product has an average weekly demand

SOLVE A AND B

(15) A product has an average weekly demand of 75 with an EOQ of 305 . The lead time is 2 weeks. The inventory holding cost is $2 per unit per week. The shortage cost is $18 per unit over the order cycle. The demand forecast error is normally distributed with a standard deviation of 25 each week. a. (10) What is the safety stock needed to mitigate the risk of high demand? b. (5) It is proposed to reduce the lead time to 1 week. This will cost $50 per order cycle. Does the reduction in safety stock inventory cost justify this cost

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!

SOLVE A AND B (15) A product has an average weekly demand of 75 with an EOQ of 305 . The lead time is 2 weeks. The inventory holding cost is $2 per unit per week. The shortage cost is $18 per unit...

A small airport is considering whether it should provide jet fuel to airlines if required. To understand the possible demand, the airport surveyed its potential customers and compiled the following...

A product has an average weekly demand of 7 5 with an EOQ of 3 0 0 . The lead time is 2 weeks. The inventory holding cost is $ 2 per unit per week. The shortage cost is $ 1 8 per unit over the order...

Example 1 : We produce two type end products: A and B . Also the sub - item C is sold as an end product. So , item C has both dependent and independent demands. ( Consider as an example end product...

IENG431-MRP Example 1: We produce two type end products: A and B. Also the sub-item C is sold as an end product. So, item C has both dependent and independent demands. (Consider as an example end...

Final Project Assignment SCM 301 Overview of the Case Analysis We have discussed many concepts in SCM 301 related to planning, sourcing, making and delivering products and services. The purpose of...

Part 1. The company sells higher-end custom-design socks in three-sock sets (rather than two). The company operates from a small packaging and distribution facility in Richmond, CA from which it...

1. Throx sells higher-end custom-design socks in three-sock sets (rather than two). The company operates from a small packaging and distribution facility in Richmond, CA from which it ships product...

Example: Sam's Pet Hotel operates 52 weeks per year, 5 days per week, and uses a continuous review inventory system. It purchases kitty litter for $11.00 per bag. The following information is...

Keaubie Co. issued $280,000, 10%, 10-year bonds payable at a price of 95, on Jan. 1, 2019 a. Journalize the issuance of the bonds b. Journalize the first semi-annual interest payment and amortization...

Your grandmother loves you and wants you to get a graduate degree. She promises to pay you $1,225 right away and an equal amount every 6 months for the a total of 5 years to encourage you to continue...

With respect to the adoption of an accounting method, when are you deemed to have adopted a method of accounting that must continue for tax

HW Problem 2.2 - Record in the following transactions in the general journal. 3/1 Kofi Annan contributed $20,000 and office equipment worth $5,000 to start Consulting Corp. 3/2 Issued check #121 to...