Reference no: EM133455426

Question

1. The manager of a local retail store is ordering a specialty item from a supplier in Toronto. The lead time is constant at five days. The store is open 300 days a year (50 weeks Monday-Saturday, with a two-week vacation). The average daily demand is 40 units, with a standard deviation of 7.6. (Assume that the distribution is approximately normal.) It costs $40 to place an order, and the annual holding cost is 30% of the inventory value. The supplier charges $8.00 per unit.

Find the economic order quantity (EOQ).

a. 346

b. 1788

c. 632

d. 36

2. The manager of a local retail store is ordering a specialty item from a supplier in Toronto. The lead time is constant at five days. The store is open 300 days a year (50 weeks Monday-Saturday, with a two-week vacation). The average daily demand is 40 units, with a standard deviation of 7.6. (Assume that the distribution is approximately normal.) It costs $40 to place an order, and the annual holding cost is 30% of the inventory value. The supplier charges $8.00 per unit.

What are the expected value and standard deviation of demand during lead time?

a. 40, 7.6

b. 40 , 16.99

c. 200 , 16.99

d. 200, 7.6

3. The manager of a local retail store is ordering a specialty item from a supplier in Toronto. The lead time is constant at five days. The store is open 300 days a year (50 weeks Monday-Saturday, with a two-week vacation). The average daily demand is 40 units, with a standard deviation of 7.6. (Assume that the distribution is approximately normal.) It costs $40 to place an order, and the annual holding cost is 30% of the inventory value. The supplier charges $8.00 per unit.

Assume that the retailer wants to set the cycle service level at 85%. what is the required safety stock level?

a. 16.99

b. 17.67

c. 40

d. 200

4. The manager of a local retail store is ordering a specialty item from a supplier in Toronto. The lead time is constant at five days. The store is open 300 days a year (50 weeks Monday-Saturday, with a two-week vacation). The average daily demand is 40 units, with a standard deviation of 7.6. (Assume that the distribution is approximately normal.) It costs $40 to place an order, and the annual holding cost is 30% of the inventory value. The supplier charges $8.00 per unit.

Assume that the retailer wants to set the cycle service level at 85%. Find the reorder point for a continuous review system.

a. 18

b. 240

c. 200

d. 218

5. The manager of a local retail store is ordering a specialty item from a supplier in Toronto. The lead time is constant at five days. The store is open 300 days a year (50 weeks Monday-Saturday, with a two-week vacation). The average daily demand is 40 units, with a standard deviation of 7.6. (Assume that the distribution is approximately normal.) It costs $40 to place an order, and the annual holding cost is 30% of the inventory value. The supplier charges $8.00 per unit.

Assume that the order quantity is 700 per order. what is the ordering cost?

a. 740

b. 685

c. 215

d. 28000

6. The manager of a local retail store is ordering a specialty item from a supplier in Toronto. The lead time is constant at five days. The store is open 300 days a year (50 weeks Monday-Saturday, with a two-week vacation). The average daily demand is 40 units, with a standard deviation of 7.6. (Assume that the distribution is approximately normal.) It costs $40 to place an order, and the annual holding cost is 30% of the inventory value. The supplier charges $8.00 per unit.

Assume that the order quantity is 700 per order. what is the annual holding cost?

a. 840

b. 1680

c. 2800

d. 28800

7. The manager of a local retail store is ordering a specialty item from a supplier in Toronto. The lead time is constant at five days. The store is open 300 days a year (50 weeks Monday-Saturday, with a two-week vacation). The average daily demand is 40 units, with a standard deviation of 7.6. (Assume that the distribution is approximately normal.) It costs $40 to place an order, and the annual holding cost is 30% of the inventory value. The supplier charges $8.00 per unit.

Find the annual cost of this system, identifying and including all relevant components as well as the cost of goods.

a. 96,802 $

b. 97,517 $

c. 96,000 $

d. 97,561 $

8. The manager of a local retail store is ordering a specialty item from a supplier in Toronto. The lead time is constant at five days. The store is open 300 days a year (50 weeks Monday-Saturday, with a two-week vacation). The average daily demand is 40 units, with a standard deviation of 7.6. (Assume that the distribution is approximately normal.) It costs $40 to place an order, and the annual holding cost is 30% of the inventory value. The supplier charges $8.00 per unit.

Recently the lead times exhibited some variation, which requires a rethinking of the ordering policy. Assume that the current lead times can be approximated by a normal distribution with a mean of six days and a standard deviation of 1.2 days. Find the amount of safety stock under these changed circumstances (cycle service level 85%).

a. 51.48

b. 294

c. 240

d. 53.54

9. The manager of a local retail store is ordering a specialty item from a supplier in Toronto. The lead time is constant at five days. The store is open 300 days a year (50 weeks Monday-Saturday, with a two-week vacation). The average daily demand is 40 units, with a standard deviation of 7.6. (Assume that the distribution is approximately normal.) It costs $40 to place an order, and the annual holding cost is 30% of the inventory value. The supplier charges $8.00 per unit.

Recently the lead times exhibited some variation, which requires a rethinking of the ordering policy. Assume that the current lead times can be approximated by a normal distribution with a mean of six days and a standard deviation of 1.2 days. Find the amount of reorder point under these changed circumstances.

a. 51.48

b. 240

c. 294

d. 53.54