Determine the weekly demand and lead time, Operation Research

Family Application specialises in selling major appliances for use in kitchen remodelling.  One of its more popular items is the SubZero refrigerator.  Over the past 40 weeks, the store has collected data regarding the weekly demand for this refrigerator.  On the basis of these data, the following demand distribution has been estimated:

The store's policy is to reorder up to 15 refrigerators whenever the inventory on hand

Weekly Demand                     Probability

0                                              0.25

1                                              0.15

2                                              0.15

3                                              0.25

4                                              0.1

5                                              0.1

reaches five or fewer at the end of a week. The holding cost for each refrigerator is $2 per week, and the cost of reordering is $50. If a customer wants a SubZero refrigerator and Family is out of stock, the customer will go elsewhere and the sale is lost. The company estimates that it suffers a goodwill cost of $40 for each lost sale.

Current inventory is seven refrigerators. Lead time for delivery can be described by the following distribution:

Lead Time                   Probability

1 week                         0.3

2 weeks                       0.5

3 weeks                       0.2

(a)  Conduct a 10-week simulation of Family's inventory situation regarding the SubZero refrigerator to determine the total cost for this period. Use random number generator of Microsoft Excel to determine the weekly demand and to determine the lead time.  

(b)  SubZero is  offering Family a new policy of automatically delivering five refrigerators every two weeks. Conduct a 10-week simulation of Family's inventory situation under this plan and determine the total cost for the 10-week period.

(c)  On the basis of your answers to part (a) and (b), what would you recommend to Family management regarding the supplier's offer?

Posted Date: 2/28/2013 2:57:21 AM | Location : United States







Related Discussions:- Determine the weekly demand and lead time, Assignment Help, Ask Question on Determine the weekly demand and lead time, Get Answer, Expert's Help, Determine the weekly demand and lead time Discussions

Write discussion on Determine the weekly demand and lead time
Your posts are moderated
Related Questions
Write a research paper in relation to a Software Design related topic. Diagrams and drawing of attention to key points through highlighting, bulleting etc is encouraged. Questi

Normal 0 false false false EN-IN X-NONE X-NONE

What is the role of decision making in OR

Solve the following Linear Programming Problem using Simple method. Maximize Z= 3x1 + 2X2 Subject to the constraints: X1+ X2 = 4 X1 - X2 = 2 X1, X2 = 0

#A paper mill produces two grades of paper viz., X and Y. Because of raw material restrictions, it cannot produce more than 400 tons of grade X paper and 300 tons of grade Y paper


Steps of Research Process The steps of research process have already been discussed in theory. Here we shall outline the procedure of conducting the research. i) Formulate t

Choose a publicly traded company (NYSE, AMX, or OTC) that interests you. If you don't know how to choose a company, think of IBM, DELL computer, Nike, Apple computer, GM, Ford, Nok

This method involves a systematic and comprehensive study of a particular community organization group etc, with a view to the analysis of a social problem and the presen

The Best Corporation is considering making either minor or major repairs to a malfunctioning production process.  When the process is malfunctioning, the percentage of defective it