Calculate safety stock and reorder point

Assignment Help Operation Management

Reference no: EM13108920

A fast-food restaurant buys hamburger buns from a national bakery supplier. The daily usage of buns at the restaurant is normally distributed with an average of 160 and standard deviation of 10. It takes 4 days for the supplier to deliver. The purchasing agent at the restaurant has established a 99.7% service level. Calculate:

a) The Safety Stock and Reorder Point for the restaurant.
b) The fast-food restaurant now considers ordering hamburger buns from a local bakery. To estimate its costs, the restaurant assumes now those buns are used at the (constant) rate of 100 per day and are purchased at $0.025 per bun. And it costs $1 for each order placed and the annual inventory holding cost per unit is 25% of the unit purchase cost. How much should be ordered (rounded to the nearest integer) each time to minimize the restaurant's total annual costs? And what is the length of order cycles (i.e. time between orders) in days? Assume the restaurant operates 360 days per year.

Reference no: EM13108920

Questions Cloud

Determine the calorimeter constant or eat capacity : Determine the calorimeter constant or eat capacity, for this calorimeter if the specific heat for water= 4.184 J/goC.

Concepts and properties of hypothesis testing : What is a hypothesis? Specifically, is it a statement about the population or the sample? What is the purpose of hypothesis testing?

Explain how those assessed strategies could be improved : Develop a two- to three-page paper in the correct APA writing style and synthesize your concept of explain how those assessed strategies could be improved and impact the successful marketing of the product?

Determine which reaction must be endothermic : where all compounds are assumed as covalent then determine which reaction must be endothermic and also explain your answer briefly?

Calculate safety stock and reorder point : A fast-food restaurant buys hamburger buns from a national bakery supplier. The daily usage of buns at the restaurant is normally distributed with an average of 160 and standard deviation of 10.

Illustrate what are three basic functions of an organization : Illustrate what are the three basic functions of an organization? Do all organizations/organizations (Private, Government, Not-for-profit) perform these three functions?

Hypothesis-tests and errors : With each hypothesis, indicate whether the appropriate analysis would be a one-tailed test or a two-tailed test and indicate a type I and type II error, given the context of the hypothesis.

Compute the dh for this reaction : Compute the ΔH for this reaction and express your answer in kilojoules if the given . Bond Energies (kJ/mol) are N-Cl 201 , Cl-Cl 243 , N-H 389 ,H-Cl 431

Illustrate how to compute beta for test : Use the significance level of alpha = .05 to test claim that p > .5. Sample is simple random sample n = 50. Illustrate how to compute beta for test and suppose true population proportion is .6.

User Account

All Pages