What is incremental inventory carrying cost of suggestion

Assignment Help Operation Management
Reference no: EM131919324

Question: Talbot Industries is evaluating its service level policy for a product that is considered critical to customers. Demand for the item averages 100 units per day and the lead time from the supplier of the item averages 6 days. An analysis of demand and lead time patterns has shown that the standard deviation of demand during lead time is 110 units. The existing service level policy allows for a stockout probability of 10 percent during the replenishment cycle. Marketing managers claim that the item is so critical that the firm should carry three standard deviations of safety stock. If the item cost is $60 and Talbot's inventory carrying cost is 20 percent, what is the incremental inventory carrying cost of the suggestion by marketing managers?

Reference no: EM131919324

Questions Cloud

What will be the inventory turnover rate for raspberry syrup : Meyer Stores carries a specialty line of flavored syrups. One of the most popular of these is raspberry syrup which sells, on average, 30 bottles per week.
Explain why christina did not hire another consultant : Christina runs IT consulting firm in a competitive market. Assuming her goal is to maximize her profits, explain why Christina did not hire another consultant.
What is the after-tax salvage value : What is the After-tax Salvage Value if the tax rate is 33 percent? The MACRS allowance percentages are as follows, commencing with year one
What do you do to build a productive team : Do you prefer to work in groups or solo? From your experience, are you more productive working in a group or on your own?
What is incremental inventory carrying cost of suggestion : Talbot Industries is evaluating its service level policy for a product that is considered critical to customers. Demand for the item averages 100 units per day.
Croatia has a managed floating exchange rate : Croatia has a managed floating exchange rate. How would this be appealing for a German MNC operating in Croatia? For a U.S. MNC operating in Croatia?
What information would you need to know to decide : You are considering hiring an additional worker. What information would you need to know to decide whether doing so would increase or decrease your profit?
How would you price it to achieve your objectives : At the other end of the pricing spectrum, why would a consumer goods company provide a coupon that makes their new snack product all but free?
Give an example of land labor and capital : Consider the factors of production that go into a fast-food restaurant. Give an example of land, labor, and capital.

Reviews

Write a Review

Operation Management Questions & Answers

  Voip system upgrade and software development

Quality management for VOIP System Upgrade and Software Development.

  What moral choices did you have to make

Discuss a situation in which you were a leader, and had to make a moral choice. Describe the circumstances.

  Electronic memory material available per month

If Apple only has 30,000 GB of electronic memory material available per month how many of each iPOD model should be produce to maximize the total profit?

  Secondary education and federal influence

While federal funding of primary and secondary education and federal influence on local schools have both grown considerably in recent years, K–12 education is still largely under the control of state and local governments. How might U.S. public scho..

  International business depends upon the dominant religion

International business depends upon the dominant religion, social structure, and educational system of a country. Suppose a US-based company needs to understand the country “P” before setting a project there. Suppose the Indian culture is secularism,..

  Five of the external stakeholders of organizations

Discuss at least five of the external stakeholders of organizations that lie in the task environment. Explain why each of these is important to the organization.

  Describe what your role would be in a network organization

Describe what your role would be in a network organization and the capabilities and roles of other firms you would want in your network.

  Entering in a work breakdown structure

Develop gantt chart (by entering in a work breakdown structure) in ms project for any project.

  If law and regulation embed the moral framework

If law and regulation embed the moral framework and businesses have no extra-legal obligations, expertise or responsibility, are businesses transgressing their proper limits when they influence legislation and/or regulation?

  Culture prior to making the decision to expand

Research a company that has recently expanded internationally. Apply the PESTEL model to discuss some of the risks and issues that the company had to consider prior to making the decision to expand and how that may have impacted the mode of entry. Wh..

  Contrast convenience products and shopping products

Compare and contrast convenience products, shopping products, and specialty products(use examples).

  Boundaries and limitations associated with each project

What criteria would you recommend USP use in selecting its projects this year? What projects would you recommend USP fund this year? Are there any types of projects you would recommend USP pursue that were not proposed? What are the boundaries and li..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd