Question 15$1h$0.50$0.75Estimate the cost of a stock-out if the margin is $1 and half the time the customer simply doesn'buy anything.$0.25BQuestion 16nwacc.instructure.comTH2mond of 6. Unfortunatel:

Introduction: A stockout happens when adequate stock is inaccessible anytime in the production…

Answered: Estimate the cost of a stock-out if the…

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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Consider a periodic review system, where orders are placed every 20 days. The firm strives to provide a 94.41% cycle service level. Demand averages 415 units per day, and the standard deviation of demand per day is 105 units. Lead time is 12 days (round Z-values, standard deviations to two decimal places). Question content area bottom Part 1 a. How many units of safety stock should be held? enter your response here units (round your response to the nearest integer). b. What should the target inventory level (order-up-to level) be? enter your response here units (round your response to the nearest integer). c. Suppose that it is time to review the item. There are 152 units in inventory, and there is an outstanding backorder for 455 units. An order for 129 units is on the way. How many units should be ordered now? enter your response here units (round your response to the nearest integer).
Your firm uses a continuous review system and operates 52 weeks per year. One of the Stock-Keeping Units (SKUs) has the following characteristics:Demand = 20000 units/year = 385 units/weekOrdering cost = $40/orderHolding cost = $2/unit/yearService level = 95 percentz=1.65Lead time = 2 weeksDemand is normally distributed, with a standard deviation of weekly demand of 100 units. a)Calculate the item's EOQ. b)Find the safety stock and reorder point that provide a 95 percent service level. c)For these policies, what are the annual costs of (i) holding the cycle inventory and (ii) placing orders?
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An apartment complex has a vacancy rate of 5%. If the apartment's PG is $450,000, what is the apartment's vacancy cost? $32,000 $22.500 S2.050 $47,500
Which of the following accounts would be assigned a higher level of risk: Building or Merchandising Inventory? Explain your answer.
A local club is selling Christmas trees and deciding how many to stock for the month of December. Suppose that demand is normally distributed with a mean of 250 and standard deviation of 40, trees have no salvage value at the end of the month, trees cost $11, and trees sell for $47. What should the service level be? (Do not round intermediate calculations. Round answer to two decimal places.) O A. 0.34 OB. 0.23 O C. 0.77 O D. 0.84 O E. unable to determine given the above information
Explain the detailed steps in an ABC Analysis and illustrate the steps using the example of a company's inventory that is given below. Part Unit Cost Annual Usage 1 100 21 300 3 12 280 4 22 320 8 150 15 180 14 280 25 300 10 260 10 18 160 6789
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Widgets cost $20/unit to produce and are sold at 40$/unit. The firm has fixed operating costs of $60,000. If the fixed operating costs are increased 15%, then what percentage increase in sales revenue is required to break-even?
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A computer company's yearly inventory cost is 39 percent (which accounts for the cost of capital for financing the inventory, warehouse space, and the cost of obsolescence). Last year, the company had $375 million in inventory and cost of goods sold of $29 billion.What is the company's total inventory cost for the year (in million $s)? Note: Round your answer to the nearest integer.
A purchasing agent need not worry about a tiny difference in price when a large quantity is being bough; True or False

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Estimate the cost of a stock-out if the margin is $1 and half the time the customer simply doesn buy anything. $1 $0.50 $0.75 $0.25