Daily demand of a chemical at an oil refinery is normally distributed with a mean of 60 litres and a standard deviation of 7. The supplier reliably delivers the chemical by maintaining a constant lead time of 1 week. There are no delivery charges from the supplier. Sales occur throughout the year.An order placement requires one hour of an administrative employee who is paid $20 per hour. Receiving and storing a chemical shipment requires two workers to work for half an hour. Workers are paid $12 per hour each. Chemical’s purchase price is $500 per litre. Annual cost of capital is 5%. Other holding costs are estimated to be $0.5 per litre.Find the order quantity and the reorder point to satisfy a 95% service level during the lead time.(Round answers to 2 decimal places.) Task 6:Daily demand of a chemical at an oil refinery is normally distributed with a mean of 60 litres and a standard deviationof 7. The supplier reliably delivers the chemical by maintaining a constant lead time of 1 week. There are no deliverycharges from the supplier. Sales occur throughout the year.An order placement requires one hour of an administrative employee who is paid $20 per hour. Receiving and storing achemical shipment requires two workers to work for half an hour. Workers are paid $12 per hour each. Chemical'spurchase price is $500 per litre. Annual cost of capital is 5%. Other holding costs are estimated to be $0.5 per litre.Find the order quantity and the reorder point to satisfy a 95% service level during the lead time.(Round answers to 2 decimal places.)

given,Average daily demand, d = 60 litres Std dev of daily demand, σ = 7 Lead time, L = 1 week = 7…

Answered: Daily demand of a chemical at an oil…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter11: Simulation Models

Section: Chapter Questions

Problem 47P

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Daily demand of a chemical at an oil refinery is normally distributed with a mean of 60 litres and a standard deviation of 7. The supplier reliably delivers the chemical by maintaining a constant lead time of 1 week. There are no delivery charges from the supplier. Sales occur throughout the year.

An order placement requires one hour of an administrative employee who is paid $20 per hour. Receiving and storing a chemical shipment requires two workers to work for half an hour. Workers are paid $12 per hour each. Chemical’s purchase price is $500 per litre. Annual cost of capital is 5%. Other holding costs are estimated to be $0.5 per litre.

Find the order quantity and the reorder point to satisfy a 95% service level during the lead time.

(Round answers to 2 decimal places.)

Task 6:
Daily demand of a chemical at an oil refinery is normally distributed with a mean of 60 litres and a standard deviation
of 7. The supplier reliably delivers the chemical by maintaining a constant lead time of 1 week. There are no delivery
charges from the supplier. Sales occur throughout the year.
An order placement requires one hour of an administrative employee who is paid $20 per hour. Receiving and storing a
chemical shipment requires two workers to work for half an hour. Workers are paid $12 per hour each. Chemical's
purchase price is $500 per litre. Annual cost of capital is 5%. Other holding costs are estimated to be $0.5 per litre.
Find the order quantity and the reorder point to satisfy a 95% service level during the lead time.
(Round answers to 2 decimal places.)

Features Features Normal distribution is characterized by two parameters, mean (µ) and standard deviation (σ). When graphed, the mean represents the center of the bell curve and the graph is perfectly symmetric about the center. The mean, median, and mode are all equal for a normal distribution. The standard deviation measures the data's spread from the center. The higher the standard deviation, the more the data is spread out and the flatter the bell curve looks. Variance is another commonly used measure of the spread of the distribution and is equal to the square of the standard deviation.

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