Question: WEEK 1 2 3 4 5 6 7 8 9 10 Sales 110 115 125 120 125 120 130 115 110 130 A shop is

WEEK	1	2	3	4	5	6	7	8	9	10
Sales	110	115	125	120	125	120	130	115	110	130

A shop is open 5 days per week and 50 weeks per year. The weekly demand for water bottles is normally distributed with an average of 80 bottles per week, and a standard deviation of 10 bottles. Each bottle costs 500 Baisas. Orders cost OMR 2 and the holding rate is 10% per year.

1. Compute the EOQ and the number of orders on average made during the year.

2. The shop owner wishes to maintain a 95% service level. What would be the safety stock, the reorder point and the total cost if:

a) There is a constant lead time of 3 weeks?

b) The average lead time is 2 weeks, with a standard deviation of 1 week?

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!

Ali is a drug wholesaler supplying 55 independent drug stores. Ali wishes to determine an optimal inventory policy for Comfort, a headache remedy. Sales of Comfort are relatively constant as the past...

Q.2. Find standard time of Allen 17-inch vertical single-spindle drill according to the ten observation data of its elements. Take rating factor and total allowances as 105% and 5% respectively....

The following is the time phased inventory status record for the frame of the Kangaroo Special BMX. Use a lot-for-lot ordering system to determine when orders should be released. Frame: Week LT=1...

Question 8: Sailors Inc. has a problem. They produce boats which are expensive to produce and store, so the company tends to keep inventory low. At the same time, it is important to respond to...

I. The Northridge Company tends to keep the inventory low. At the same time, it is important to respond to demand quickly, since a customer who wants a product K is very likely to get one from a...

4. A Heating, Cooling and Air Condition (HVAC) company has a problem. The heat pumps are fairly expensive to make and store, so the company tends to keep the inventory low. At the same time, it is...

The Northridge Company tends to keep the inventory low. At the same time, it is important to respond to demand quickly, since a customer who wants a product K is very likely to get one from a...

A cargo ship, displacing 5588 tons, floats at draft of 4.57 m forward and 5.03 m aft, measured at marks 70.1 m forward of and 51.8 m abaft amidships. The vessel grounds on a rock 22.9 m forward of...

Vd ) 12V (6mA Vf 12 k2 Vc CUIT, answer the followings 3 k. 6V 6 k2 10 the correct equation to find the absorbed power by the independent current source is: * (1 Point) O none O (y - va) 6 u9 (?A PA)...

h. The budget committee comprehensive budget financial budgets operating budgets participative budgeting production budget rolling budget safety stock slack strategic planning variance zero-based...

When older adults have difficulty with transportation and communication, or may be reluctant to request needed assistance to which they are entitled, they may be in need of: Group of answer choices...