Question: The Toyota dealer from problem 3 is considering installing either a Q or a P system for inventory control. The standard deviation of demand has

The Toyota from problem 3 is considering installing either a Q or a P system for inventory control. The standard deviation of demand has been 4 units per month, and the replenishment lead time is two months. A 95 percent service level is desired.
a. If a continuous review system is used, what is the value of Q and R that should be used?
b. If a periodic review system is used, what is the value of P and T that would be applicable?
c. What are the pros and cons of using the P system compared with using the Q system for this part?

Step by Step Solution

★★★★★

3.41 Rating (173 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

a Q 14 units from part 3a R m s m 8 unit s lead time is 2 months average demand per month is 4 units ... View full answer

Question Has Been Solved by an Expert!

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

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

555-B-M-L-S-C-M (3640).docx

120 KBs Word File

Students Have Also Explored These Related Management Leadership Questions!

The Suregrip Tire Company carries a certain type of tire with the following characteristics: Average annual sales = 600 tires Ordering cost = $40 per order Carrying cost = 25 percent per year Item...

The local Toyota dealer has to decide how many spare shock absorbers of a particular type to order for repairing Toyota automobiles. This shock absorber has a demand of four units per month and costs...

Suppose that for problem 1 in the chapter, the Always Fresh Grocery Store is offered a discount by its supplier if more than 50 cases of tea are ordered at one time. The unit item costs are $80 per...

Topic review 7: BADB3013 Production and Operations Management BADB3013 Production and Operations Management Topic Review : Topic7 All questions examine CLO3. (45 Marks) 1. The Speedy Grocery Store...

Production and operations Management 1. The Speedy Grocery Store Carries a particular brand of coffee that has the following characteristic:...

1. The Speedy Grocery Store Carries a particular brand of coffee that has the following characteristic: Sales= 10 cases per week Ordering cost=10 per order Carrying cost = 30% per year Item cost = 80...

only q number 3 2. The local Toyota dealer has to decide how many spare shock absorbers of a particular type to order for repairing Toyota automobiles. This shock absorber has a demand of four units...

Production and Operations Management 2. The local Toyota dealer has to decide how many spare shock absorbers of a particular type to order for repairing Toyota automobiles. This shock absorber has a...

3. The local Toyota dealer from problem 2 is considering installing either a Q or P system for inventory control. The past standard deviation of demand has been 2.5 units per month, and the...

A plano-convex lens having a radius of curvature of r = 4.00m is placed on a concave glass surface whose radius of curvature is R= 12.0 m, as shown in Figure P37.65. Determine the radius of the 100th...

In the Dominican Republic, factory-bottled water is the primary source of drinking water for 67% of the urban population. In 2009, the population of the Dominican Republic was 9,650,054, of which...

Assume a 1 6 - year - old person purchases one Starbucks Caramel Ribbon Frappuccino frequently on their way to class. They purchase 1 6 Frappuccino s per month. Caramel Ribbon Frappuccino s cost $ 5...

If during a snowstorm a company remains open for business, can the employer deduct from the pay of salaried employees who do not come to work without jeopardizing their exempt status? If the employer...

The State of Virginia has instituted a series of Standards of Learning (SOL) tests in math, history, English, and science that all high school students must pass with a grade of 70 before that are...

Discuss in general terms how forecasting might be used for planning to address these specific problems and the role of forecasting in initiating a TQM approach. Include in your discussion the types...

Develop an appropriate forecast model for bookstore management to use to forecast computer demand for the next fall semester and indicate how accurate it appears to be. What other forecasts might be...

Aero Motorcycles is considering opening a new manufacturing facility in Fort Worth to meet the demand for a new line of solar-charged motorcycles (who wants to ride on a cloudy day anyway?) The...

Suppose that you shorted five futures contracts on the euro, receiving a price of 1 . 2 1 6 6 ( day 1 ) . Your broker requires initial margins of $ 1 5 0 0 ? contract and maintenance margins of $ 1 1...

ashley has a major medical health insurance policy with a $2 million lifetime limit. The policy has a $500 calendar year deductible and a 20 percent coinsurance clause. Ashley had outpatient surgery...