1. a) Zoey Enterprises manufactures solar engines for helicopters. Given the fuel savings available, new orders for 125 units have been made bycustomers requesting credit. The variable cost is $11,400 per unit, and the credit price is $13,000 each. Credit is extended for one period. Therequired return is 1.9 percent per period. If Zoey Enterprises extends credit, it expects that 30 percent of the customers will be repeat customers andplace the same order every period forever, and the remaining customers will place one-time orders. Should credit be extended?2. b) Now, assume that the probability of default is 15 percent. Should the orders be filled now? Assume the number of repeat customers is affected bythe defaults. In other words, 30 percent of the customers who do not default are expected to be repeat customers.

: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…

Answered: 1. a) Zoey Enterprises manufactures…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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Q2) Groundz Coffee Shop uses 4 kgs of a specialty tea weekly; each kg costs $16. Carrying costs are $1 per kg per week because space is very scarce. It costs the firm $8 to prepare an order. Assume 52 weeks per year. How many kgs of tea should Groundz order at a time? What is total annual cost. How many orders should Groundz place annually. Q2) Groundz Coffee Shop uses 4 kgs of a specialty tea weekly; each kg costs $16. Carrying costs are $1 per kg per week because space is very scarce. It costs the firm $8 to prepare an order. Assume 52 weeks per year. How many kgs of tea should Groundz order at a time? What is total annual cost. How many orders should Groundz place annually.
A pharmacist is trying to determine the inventory order and stock levels for a particular drug. The following information is available about the drug. Demand (D) 85 tablets/week Working weeks per year 52 weeks Unit holding cost per year (H) $6 Order cost (S) $44/order Standard deviation of weekly demand (sd) 15 tablets Lead time (L) 2 weeks Desired cycle service level 95% If the pharmacist uses the continuous review (Q) system to control the inventory of the drug, what would be the order quantity and reorder point? If the pharmacist uses the periodic review (P) system to control the inventory of the drug, what would be the review interval and target inventory level? (Hint: Use the EOQ model to derive the review interval P)
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*Note: "11102" has been attempted and is not the correct answer to this problem.
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