Answered: 4. KraftyCity is a large retailer that… | bartleby

MATLAB: An Introduction with Applications

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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Question

4. KraftyCity is a large retailer that sells power tools and other hardware supplies. One of its
products is the KraftyMan workbench. Information on the workbench is as follows:
1,200
$15 per year
=
: $200 per order
Annual demand =
Holding cost
Ordering cost
=
a. (*) What is the economic order quantity for the workbench?
b. (**) Suppose that KraftyCity has to pay $50 per workbench for orders under
200 but only $42 per workbench for orders of 201 or more. Using the
information provided in problem 30-40, what order quantity should
KraftyCity use?
c. (*) The lead time for KraftyCity workbenches is 3 weeks, with a standard
deviation of 1.2 weeks, and the average weekly demand is 24, with a standard
deviation of 8 workbenches. What should the reorder point be if KraftyCity
wants to provide a 95% service level?
d. (**) Now suppose the supplier of workbenches guarantees KraftyCity that the
lead time will be a constant 3 weeks, with no variability (i.e., standard
deviation of lead time = 0). Recalculate the reorder point, using the demand
and service level information in problem 3-6. Is the reorder point higher or
lower? Explain why.

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