Question: Use this information to answer the next 8 questions A company sells ten variants of a product. To make postponement possible so the inventories can
Use this information to answer the next 8 questions
A company sells ten variants of a product. To make postponement possible so the inventories can be kept in component form the company needs to introduce commonality in the product. Currently, total cost for each device is $900. Introducing commonality will increase the cost to $990. Weekly demand for one of the ten variants (P1) is normally distributed, with a mean of 800 and a standard deviation of 210. Each of the other nine variants (P2 to P10) has a weekly demand of 25 with a standard deviation of 20. The company aims to provide a 90 percent level of service. Lead time for parts is 3 weeks. The company manages all inventories using a continuous review policy and incurs an annual holding cost of 15%.
How much safety inventory of P1 must the company keep without commonality?
| None of the options | ||
| 444 | ||
| 466 | ||
| 646 | ||
| 664 |
How much safety inventory for each of P2 to P10 must the company keep without commonality?
| 33.4 | ||
| 34.3 | ||
| None of the options | ||
| 43.4 | ||
| 44.4 |
What is the annual holding cost without commonality, assuming the required safety inventory (P1 to P10) is 866?
| More than $116,000 | ||
| Less than $110,000 | ||
| Between $110,000 and $112,000 | ||
| Between $114,000 and $116,000 | ||
| Between $112,000 and $114,000 |
What is the standard deviation of the aggregate weekly demand?
| 128 | ||
| None of the options | ||
| 281 | ||
| 218 | ||
| 182 |
What is the average of aggregate weekly demand?
| 1205 | ||
| 2150 | ||
| 1025 | ||
| None of the options | ||
| 1250 |
A new analysis of historical data shows that the aggregate weekly demand (P1 to P10) is 1100. What is the average of aggregate demand over lead time?
| None of the options | ||
| 3000 | ||
| 3300 | ||
| 3200 | ||
| 3100 |
The new analysis also shows that the standard deviation of the aggregate weekly demand is 220. What is the standard deviation of the aggregate demand over lead time?
| 831 | ||
| 381 | ||
| 138 | ||
| None of the options | ||
| 318 |
If the average of aggregate demand over lead time changes to 3075 and standard deviation of aggregate demand over lead time changes to 378.3, how much safety inventory must be kept in component form when the company uses common components for all variants?
| 458 | ||
| 845 | ||
| 485 | ||
| None of the options | ||
| 548 |
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