(Furniture Store) You are the store manager at a large furniture store. One of your products is a study desk. Weekly demand for the desk is normally distributed with mean 40 and standard deviation 20. The lead time from the assembly plant to your store is two weeks and you order inventory replenishments weekly. Except for part i., you use the order-up-to model to control inventory. Suppose your order-up-to level is S = 220. You are about to place an order and note that your inventory level is 100 and you have 85 desks on order. How many desks will you order? Suppose your order-up-to level is S = 220. You are about to place an order and note that your inventory level is 160 and you have 65 desks on order. How many desks will you order? What is the optimal order-up-to level if you want to target a 98 percent in-stock probability? What is the optimal order-up-to level if you want to target a 98 percent fill rate? ( Hint : adapt the exact formulae for the newsvendor problem , replacing the single period demand by the demand over lead-plus-review time.) Suppose your order-up-to level is S = 120. What is your expected end of the period on-hand inventory? Suppose your order-up-t level is S = 200. What is your fill rate? Suppose you now decide to maintain a 95 percent in-stock probability for the desk. What is the expected fill rate in this case? Suppose your order-up-to level is S = 120. Your internal cost of capital is 15 percent per year and each desk costs $200. What is your total cost of capital for the year for inventory in the store? Reconsider part h. under the assumption that there is a fixed order cost of $500 and that you target a service level or in stock probability of 98%. What kind of inventory policy do you recommend? What are your recommended policy parameters under this policy?
Critical Path Method
The critical path is the longest succession of tasks that has to be successfully completed to conclude a project entirely. The tasks involved in the sequence are called critical activities, as any task getting delayed will result in the whole project getting delayed. To determine the time duration of a project, the critical path has to be identified. The critical path method or CPM is used by project managers to evaluate the least amount of time required to finish each task with the least amount of delay.
Cost Analysis
The entire idea of cost of production or definition of production cost is applied corresponding or we can say that it is related to investment or money cost. Money cost or investment refers to any money expenditure which the firm or supplier or producer undertakes in purchasing or hiring factor of production or factor services.
Inventory Management
Inventory management is the process or system of handling all the goods that an organization owns. In simpler terms, inventory management deals with how a company orders, stores, and uses its goods.
Project Management
Project Management is all about management and optimum utilization of the resources in the best possible manner to develop the software as per the requirement of the client. Here the Project refers to the development of software to meet the end objective of the client by providing the required product or service within a specified Period of time and ensuring high quality. This can be done by managing all the available resources. In short, it can be defined as an application of knowledge, skills, tools, and techniques to meet the objective of the Project. It is the duty of a Project Manager to achieve the objective of the Project as per the specifications given by the client.
. (Furniture Store) You are the store manager at a large furniture store. One of your products is a study desk. Weekly demand for the desk is
- Suppose your order-up-to level is S = 220. You are about to place an order and note that your inventory level is 100 and you have 85 desks on order. How many desks will you order?
- Suppose your order-up-to level is S = 220. You are about to place an order and note that your inventory level is 160 and you have 65 desks on order. How many desks will you order?
- What is the optimal order-up-to level if you want to target a 98 percent in-stock probability?
- What is the optimal order-up-to level if you want to target a 98 percent fill rate? ( Hint : adapt the exact formulae for the newsvendor problem , replacing the single period demand by the demand over lead-plus-review time.)
- Suppose your order-up-to level is S = 120. What is your expected end of the period on-hand inventory?
- Suppose your order-up-t level is S = 200. What is your fill rate?
- Suppose you now decide to maintain a 95 percent in-stock probability for the desk. What is the expected fill rate in this case?
- Suppose your order-up-to level is S = 120. Your internal cost of capital is 15 percent per year and each desk costs $200. What is your total cost of capital for the year for inventory in the store?
- Reconsider part h. under the assumption that there is a fixed order cost of $500 and that you target a service level or in stock probability of 98%. What kind of inventory policy do you recommend? What are your recommended policy parameters under this policy?
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