Cake company uses 4,629 quart bottles of Chocolate sauce each year. The sauce costs 5 per bottle nd is served only in full bottles for food safety purposes. The company's inventory manager alculated that each time an order is placed, it costs 13 and holding costs are 20 percent of the purchase price. Once the order is placed, it takes 3 weeks for an order to arrive. The company works For 47 weeks per year. The company is considering to use the inventory system techniques which minimizes the inventory cost. Assume that both, lead time and customer demand are variable. Customer demand's standard deviation 27 units per week and standard deviation for lead time 1. Find out the safety stock needed to achieve 95% customer service level.
Cake company uses 4,629 quart bottles of Chocolate sauce each year. The sauce costs 5 per bottle nd is served only in full bottles for food safety purposes. The company's inventory manager alculated that each time an order is placed, it costs 13 and holding costs are 20 percent of the purchase price. Once the order is placed, it takes 3 weeks for an order to arrive. The company works For 47 weeks per year. The company is considering to use the inventory system techniques which minimizes the inventory cost. Assume that both, lead time and customer demand are variable. Customer demand's standard deviation 27 units per week and standard deviation for lead time 1. Find out the safety stock needed to achieve 95% customer service level.
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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Transcribed Image Text:A Cake company uses 4,629 quart bottles of Chocolate sauce each year. The sauce costs 5 per bottle
and is served only in full bottles for food safety purposes. The company's inventory manager
calculated that each time an order is placed, it costs 13 and holding costs are 20 percent of the
purchase price. Once the order is placed, it takes 3 weeks for an order to arrive. The company works
for 47 weeks per year. The company is considering to use the inventory system techniques which
minimizes the inventory cost.
Assume that both, lead time and customer demand are variable. Customer demand's standard
deviation 27 units per week and standard deviation for lead time = 1. Find out the safety stock
needed to achieve 95% customer service level.
=
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