centre operations which are open 7 days a week. The ingredients include cheese which is used across a range of sandwiches and demand is on avera 3.8 kg per day with a daily standard deviation of 2.2kg. The cheese is delivere n packs of 2kg and the cheese costs €7.50 per kg. The sandwich bar estimate that it costs €6.50 to raise and process a purchase order when all manageme ime and delivery charges are taken into account. The current distributor delivers with an average lead time of 3 days and a standard deviation on tha ead time of 1.4 days. Annual holding costs for stock in the sandwich bar is estimated to be 22% of the cost of the material stored as space is limited. a) Calculate the Economic Order Quantity for the cheese. How much should the sandwich bar order and roughly how often will they be placing an order the distributor for this product? ( b) Calculate the reorder level the sandwich bar should use to ensure an in- stock frequency of 99% c) The sandwich bar is approached by another distributor who proposes a cheese delivery service with a reduced delivery charge, but orders can only placed once a week on a Thursday and delivered the following Tuesday i.e. guaranteed 5 days later. The reduced delivery charge means that the cost to the sandwich bar to raise and process a purchase order is €3.00. What would be the ideal order quantity and safety stock to apply with this new distributor d) Which distributor would you recommend the sandwich bar use? And wha order quantity and safety stock level would you use? Explain all the factors yo considered in making the recommendations.
centre operations which are open 7 days a week. The ingredients include cheese which is used across a range of sandwiches and demand is on avera 3.8 kg per day with a daily standard deviation of 2.2kg. The cheese is delivere n packs of 2kg and the cheese costs €7.50 per kg. The sandwich bar estimate that it costs €6.50 to raise and process a purchase order when all manageme ime and delivery charges are taken into account. The current distributor delivers with an average lead time of 3 days and a standard deviation on tha ead time of 1.4 days. Annual holding costs for stock in the sandwich bar is estimated to be 22% of the cost of the material stored as space is limited. a) Calculate the Economic Order Quantity for the cheese. How much should the sandwich bar order and roughly how often will they be placing an order the distributor for this product? ( b) Calculate the reorder level the sandwich bar should use to ensure an in- stock frequency of 99% c) The sandwich bar is approached by another distributor who proposes a cheese delivery service with a reduced delivery charge, but orders can only placed once a week on a Thursday and delivered the following Tuesday i.e. guaranteed 5 days later. The reduced delivery charge means that the cost to the sandwich bar to raise and process a purchase order is €3.00. What would be the ideal order quantity and safety stock to apply with this new distributor d) Which distributor would you recommend the sandwich bar use? And wha order quantity and safety stock level would you use? Explain all the factors yo considered in making the recommendations.
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 sandwich bar orders its ingredients from a food distributor for use in its city
centre operations which are open 7 days a week. The ingredients include
cheese which is used across a range of sandwiches and demand is on average
3.8 kg per day with a daily standard deviation of 2.2kg. The cheese is delivered
in packs of 2kg and the cheese costs €7.50 per kg. The sandwich bar estimates
that it costs €6.50 to raise and process a purchase order when all management
time and delivery charges are taken into account. The current distributor
delivers with an average lead time of 3 days and a standard deviation on that
lead time of 1.4 days. Annual holding costs for stock in the sandwich bar is
estimated to be 22% of the cost of the material stored as space is limited.
(a) Calculate the Economic Order Quantity for the cheese. How much should
the sandwich bar order and roughly how often will they be placing an order on
the distributor for this product? --
(b) Calculate the reorder level the sandwich bar should use to ensure an in-
stock frequency of 99%
(c) The sandwich bar is approached by another distributor who proposes a
cheese delivery service with a reduced delivery charge, but orders can only be
placed once a week on a Thursday and delivered the following Tuesday i.e.
guaranteed 5 days later. The reduced delivery charge means that the cost to
the sandwich bar to raise and process a purchase order is €3.00. What would
be the ideal order quantity and safety stock to apply with this new distributor?
(d) Which distributor would you recommend the sandwich bar use? And what
order quantity and safety stock level would you use? Explain all the factors you
considered in making the recommendations.
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