What reorder point should be used

Reference no: EM13319818

Suppose that usage of cooking oil at Harry's Fish Fry is normally distributed with an average of 15 gallons/day and a standard deviation of two gallons/day. Harry has just fired the manager and taken over operating the restaurant himself. Harry has asked you to help him decide how to reorder cooking oil in order to achieve a service level which is seven times the risk of stockout (7/8). Lead time is eight days.

A) If cooking oil can be ordered as needed, what reorder point should be used?

B) If a fixed interval of 30 days is specified, how much safety stock should Harry carry?

Reference no: EM13319818

Questions Cloud

Cost-benefit matrix that compares the alternatives : Alternative One reduces wasted motion (walking) to 1% of total labor used on the assembly line. Physical lifting is reduced to no more then 12 pounds. Six people will be required on the assembly line.

Economic uncertainty and social pressures : Economic uncertainty and social pressures have caused the Russian birthrate in recent years to

An interactive television service : An interactive television service that costs $10 per month to provide can be sold on the information highway for $15 per client per month. If a service area includes a potential of 15,000 consumers, what is the most a company could spend on annual fi..

Global strategy can be a problem for the international firm : A global strategy can be a problem for the international firm if it causes the firm to overlook important local or regional differences in areas such as personnel practices or customer tastes.

What reorder point should be used : Suppose that usage of cooking oil at Harry's Fish Fry is normally distributed with an average of 15 gallons/day and a standard deviation of two gallons/day. Harry has just fired the manager and taken over operating the restaurant himself.

The economic order quantity : A service garage uses 120 boxes of cleaning cloths a year. The boxes cost $6 each. Ordering cost is $3 and holding cost is 10 percent of purchase cost per unit on an annual basis.

The order quantity that will minimize the sum of ordering : A car rental agency uses 96 boxes of staples a year. The boxes cost $4 each. It costs $10 to order staples, and carrying costs are $0.80 per box on an annual basis.

What is the risk of a stockout : A manager is reordering lubricant when the amount on-hand reaches 422 pounds. Average daily usage is 45 pounds, which is normally distributed and has standard deviation of three pounds per day. Lead time is nine days. What is the risk of a stockout?

Range of shortage costs would stocking : A manager intends to order a new machine and must now decide on the number of spare parts to order along with the machine. The parts cost $400 each and have no salvage value. The manager has compiled a frequency distribution for the probable usage of..

User Account

All Pages