Reference no: EM131222040
The manager at the local store of a national home improvement chain is studying their inventory system. He has chosen one high volume product as the first product to examine. The historical supply and demand data for this item has indicated a constant lead time of 16 days. Demand per day (d) is normally distributed with a mean demand of 2000 per day and standard deviation of 240 per day. He plans to set the in-stock probability (or service level) for this item at 95% during lead time. The ordering cost for this item is $500 per order. The product cost is $10 per unit. The annual inventory carrying cost is 30% of the item cost per year. The store operates 300 days a year. The manager decides to use the fixed quantity system (reorder point and economic order quantity). Based on the information provided, answer the following questions.
1. What is the safety stock level for this item? Round your answer to the nearest integer. Your answer is . (1 point) Note: use "NORMSINV" function in Excel to find the accurate z value.
2. What is reorder point? Round your answer to the nearest integer. Your answer is.
3. What is the economic order quantity? Round your answer to the nearest integer. Your answer is.
4. How many orders will be placed per year under the policy you find? Round your answer to the nearest integer. Your answer is.
5. Using your answers of safety stock in question 1 and EOQ in question 3, what is the average inventory level under the order policy you find (including cycle inventory and safety inventory)? Round your answer to the nearest integer. Your answer is.
6. What is the annual ordering cost? Note: use your answer from question 4. Round your answer to the nearest integer. Your answer is.
7. Using your answer from question 5, what is the annual inventory carrying cost including both cycle inventory and safety inventory? Round your answer to the nearest integer. Your answer is.
8. Based on your answers to question 6 and 7, what is the total annual inventory cost? Round your answer to the nearest integer. Your answer is.
|
What would be weighted-average contribution margin per tin
: Yumminess has asked Jordon and Taylor to consider making Extra Attack Brownies and Nutty Attack Brownies, in addition to Chocolate Attack Brownies. What would be the incremental income/loss per tin for manufacturing Extra Attack Brownies? what would ..
|
|
What is the ytm
: Soprano's Spaghetti Factory issued 11-year bonds two years ago at a coupon rate of 6.20 percent. If these bonds currently sell for 93.0 percent of par value, what is the YTM?
|
|
Identify communication techniques and strategies
: You will be assessed on your ability to: demonstrate your knowledge to identify communication techniques and strategies and apply critical thinking skills to determine the impact and effectiveness of these techniques to achieve the desired outcome f..
|
|
Identify what we can do to counter this biological attack
: A terrorist threat has been made via phone against the water system. The caller stated that they would be releasing Tularemia into the water system in the next 4-6 hours. We are not certain of where this action may take place, but we must protect ..
|
|
What is the safety stock level for this item
: What is the safety stock level for this item? Round your answer to the nearest integer. Your answer is . (1 point) Note: use "NORMSINV" function in Excel to find the accurate z value.
|
|
Write the elements of matrix r in terms of real-numbers
: TG1401 Engineering Mathematics - Write the elements of matrix R in terms of real-numbers r1, r2, ..., r100. Clearly, show at least the top 4 x 4 part and all the elements on the four corners.
|
|
List and describe the various types of buses
: What is considered to be a major weakness of RAM? Why is it important that users fully understand this weakness? Explain the concepts of read and write as it relates to RAM. What are the two main factors that determine the size of ROM?
|
|
Delivery of solar powered military troop transport vehicle
: Your company has been offered a contract for the development of and delivery of a solar powered military troop transport vehicle. The request for proposal provides all the necessary technical specifications and it also stipulates that two working, ec..
|
|
Compute the npv for project x with the cash flows
: Compute the NPV for Project X with the cash flows shown below if the appropriate cost of capital is 8 percent.- Time: 0 1 2 3 4 5.
|