Warehouse store is found to be normally distributed

Assignment Help Operation Management

Reference no: EM13902449

Daily demand for packages of five videotapes at a warehouse store is found to be normally distributed with mean 50 and standard deviation 5. When the store orders more tapes, the ordering cost is $42 and the orders take 4 days to arrive. Each pack of tapes costs $7.20 and there is a 22% annual holding cost for inventory. Assume the store is open 360 days a year. a. What is the EOQ? b. If the store wants the probability of stocking out to be no more than 5%, and demand each day is independent of the day before, what reorder point should be set? c. How much of your reorder point in part b) is safety stock?

Reference no: EM13902449

Questions Cloud

Prepare journal entries for the transactions that occurred : Enter the adjusting entry for bad debt expense at the end of 20-6. Prepare journal entries for the transactions that occurred in 20-7.

Typical profiles of international negotitators : What is the risk of relying too heavily on the typical profiles of international negotitators? Is there a benefit to using these profiles?

What is meant by first-mover advantage : What is meant by "first-mover advantage"? Give an example of a gaming situation with a first-mover advantage.

What factors might inhibit adoption of this software : Teams must enact a group of managers and software engineers at a small start-up that has developed software that enables customers to easily download and view digital books on a variety of digital devices, including PCs, iPods, and e-book readers. Ho..

Warehouse store is found to be normally distributed : Daily demand for packages of five videotapes at a warehouse store is found to be normally distributed with mean 50 and standard deviation 5. When the store orders more tapes, the ordering cost is $42 and the orders take 4 days to arrive. Each pack of..

Sports magazine publishes special edition for world series : A weekly sports magazine publishes a special edition for the World Series. The sales forecast is for the number of copies to be normally distributed with mean 800,000 copies and standard deviation 60,000 copies. It costs $0.35 to print a copy, and th..

Prepare the appropriate adjusting entry on december : McAllister's Framing and Art Supplies uses the percentage of sales method of accounting for uncollectible accounts. Prepare the appropriate adjusting entry on December 31, 20-9, and compute net realizable value.

What is a tit-for-tat strategy : How does a Nash equilibrium differ from a game's maximin solution? When is a maximin solution a more likely outcome than a Nash equilibrium?

Maximum number of tiles in inventory under current policy : Non-Slip Tile Company (NST) has been using production runs of 100,000 tiles, 10 times per year to meet the demand of 1,000,000 tiles annually. The set-up cost is $5,000 per run and holding cost is estimated at 10% of the manufacturing cost of $1 per ..

User Account

All Pages