Demand variability follows a poisson distribution

Assignment Help Operation Management

Reference no: EM131435232

Consider the data given in problem 16b at the end of chapter 2 of Factory Physics. Assume that demand variability follows a Poisson distribution and that the desired service level is 98% probability of not stocking out. Calculate the best order quantity and reorder point for Module Type B.

The data given in 16b is as follows:

Model A: cost= $150 each, used at a rate of 7 per month, leed time= 1 month

Model B: cost=$15, used at a rate of 30 per month, leed time = 0.5 month

assume 1 month= 30 days

estimate to replenish an order is $5 regardless of model.

holding cost intrest rate is 3% per month

Reference no: EM131435232

Questions Cloud

How is ebph different from evidence-based medicine : The concept of evidence-based practice is well established in numerous disciplines including psychology, social work, nursing, medicine, and public health. Respond to the following: How is EBPH different from evidence-based medicine

Industry and competitor standard ratios : Compare and contrast your company's (PepsiCo Corporation) ratios to industry and competitor standard ratios obtained from Yahoo Finance, Morningstar, MotleyFool, Macroaxis or other Internet sources, and provide a detailed answer and analysis as to..

Design and test your program in an iterative manner : Design and test your program in an iterative manner, building from simple functionality to full functionality. For example, first write a program that inputs characters and just stores them in memory.

Value of the annuity on the purchase date : Lois is purchasing an annuity that will pay $5,000 annually for 20 years, with the first annuity payment made on the date of purchase. What is the value of the annuity on the purchase date given a discount rate of 7%?

Demand variability follows a poisson distribution : Consider the data given in problem 16b at the end of chapter 2 of Factory Physics. Assume that demand variability follows a Poisson distribution and that the desired service level is 98% probability of not stocking out. Calculate the best order quant..

How was a beam of electrons shown to have wavelike propertie : How was a beam of electrons show to have wavelike properties?

What does the literature say about extrinsic motivators : Who should monitor the process and determine if the pay being awarded is having a positive effect on hard-wiring behavior? What does the literature say about extrinsic motivators such as pay

Why is a search engine a big data application : Mention four possible functions that a BI Competency Centre (BICC) would serve within an organization, and give a brief description of each.List and describe three levels or categories of analytics that are most often viewed as sequential and inde..

How would you analyze apples competitive advantage : How would you analyze Apple's (the firm) competitive advantage using the 4 dimensions? What has it been in the past, and what is it going forward?

User Account

All Pages