It is due today. Please I need help The images are how you are going to do it. For b, I thought the answer for the reorder point was 132, but it is false(not correct). I find a, but i need help with b. 1. Sam's Cat Hotel operates 52 weeks per year, 5 days per week, and uses a continuous review inventory system. It purchases kitty litter for $10.50 per bag. The following information is available about these bags. Refer to the standard normal table for z-values. ≻Demand = 100 bags/week ≻Order cost = $58/order ≻Annual holding cost = 29 percent of cost ≻Desired cycle-service level=92 percent ≻Lead time = 1 week(s) (5 working days) ≻Standard deviation of weekly demand = 18 bags ≻Current on-hand inventory is 300 bags, with no open orders or backorders. a. What is the EOQ? Sam's optimal order quantity is 445 bags. (Enter your response rounded to the nearest whole number.) What would be the average time between orders (in weeks)? The average time between orders is 4.5 weeks. (Enter your response rounded to one decimal place.) b. What should R be? The reorder point is what? bags. (Enter your response rounded to the nearest whole number.)
It is due today. Please I need help The images are how you are going to do it. For b, I thought the answer for the reorder point was 132, but it is false(not correct). I find a, but i need help with b. 1. Sam's Cat Hotel operates 52 weeks per year, 5 days per week, and uses a continuous review inventory system. It purchases kitty litter for $10.50 per bag. The following information is available about these bags. Refer to the standard normal table for z-values. ≻Demand = 100 bags/week ≻Order cost = $58/order ≻Annual holding cost = 29 percent of cost ≻Desired cycle-service level=92 percent ≻Lead time = 1 week(s) (5 working days) ≻Standard deviation of weekly demand = 18 bags ≻Current on-hand inventory is 300 bags, with no open orders or backorders. a. What is the EOQ? Sam's optimal order quantity is 445 bags. (Enter your response rounded to the nearest whole number.) What would be the average time between orders (in weeks)? The average time between orders is 4.5 weeks. (Enter your response rounded to one decimal place.) b. What should R be? The reorder point is what? bags. (Enter your response rounded to the nearest whole number.)
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
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It is due today. Please I need help
The images are how you are going to do it.
For b, I thought the answer for the reorder point was 132, but it is false(not correct).
I find a, but i need help with b.
1. Sam's Cat Hotel operates 52 weeks per year, 5 days per week, and uses a continuous review inventory system. It purchases kitty litter for $10.50 per bag. The following information is available about these bags. Refer to the standard normal table for z-values.
≻Demand = 100 bags/week
≻Order cost = $58/order
≻Annual holding cost = 29 percent of cost
≻Desired cycle-service level=92 percent
≻Lead time = 1 week(s) (5 working days)
≻Standard deviation of weekly demand = 18 bags
≻Current on-hand inventory is 300 bags, with no open orders or backorders.
a. What is the EOQ?
Sam's optimal order quantity is 445 bags. (Enter your response rounded to the nearest whole number.)
What would be the average time between orders (in weeks)?
The average time between orders is 4.5 weeks. (Enter your response rounded to one decimal place.)
b. What should R be?
The reorder point is what? bags. (Enter your response rounded to the nearest whole number.)
![**Sam's Cat Hotel Inventory Management**
Sam's Cat Hotel operates 52 weeks per year, 7 days per week, using a continuous review inventory system for purchasing kitty litter at $11.00 per bag. Below is the available information for inventory management, along with the use of a standard normal table for z-values.
- **Demand**: 85 bags/week
- **Order Cost**: $55/order
- **Annual Holding Cost**: 25% of cost
- **Desired Cycle-Service Level**: 99%
- **Lead Time**: 2 weeks (14 working days)
- **Standard Deviation of Weekly Demand**: 13 bags
- **Current On-Hand Inventory**: 310 bags (no open orders or backorders)
**Analysis**
a. **What is the EOQ?**
The Economic Order Quantity (EOQ) is calculated using the formula:
\[ \text{EOQ} = \sqrt{\frac{2DS}{H}} \]
Where:
- \( D \) is the annual demand: \( D = 85 \times 52 = 4,420 \)
- \( S \) is the ordering cost: \( S = \$55 \)
- \( H \) is the holding cost: \( H = 0.25 \times 11.00 = \$2.75 \)
Calculation:
\[ \text{Sam's optimal order quantity is} \sqrt{\frac{2 \times 4,420 \times 55}{2.75}} = 420 \text{ bags} \]
b. **What would be the average time between orders (in weeks)?**
To find the average time between orders, use:
\[ \text{TBO}_{EOQ} = \frac{\text{EOQ}}{D} \]
Where:
- EOQ = 420 bags
- \( D \) is demand in bags per week = 85
Calculation:
\[ \text{The average time between orders is} \frac{420}{85} = 4.9 \text{ weeks} \]
This calculation indicates that Sam's Cat Hotel should place an order every 4.9 weeks to optimize inventory levels.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F36a81628-4e73-47c6-859d-2f57e4b1f42c%2F9f4a5ab0-0fa5-4cfb-8109-82cb246b25b5%2F25c68qbi_processed.png&w=3840&q=75)
Transcribed Image Text:**Sam's Cat Hotel Inventory Management**
Sam's Cat Hotel operates 52 weeks per year, 7 days per week, using a continuous review inventory system for purchasing kitty litter at $11.00 per bag. Below is the available information for inventory management, along with the use of a standard normal table for z-values.
- **Demand**: 85 bags/week
- **Order Cost**: $55/order
- **Annual Holding Cost**: 25% of cost
- **Desired Cycle-Service Level**: 99%
- **Lead Time**: 2 weeks (14 working days)
- **Standard Deviation of Weekly Demand**: 13 bags
- **Current On-Hand Inventory**: 310 bags (no open orders or backorders)
**Analysis**
a. **What is the EOQ?**
The Economic Order Quantity (EOQ) is calculated using the formula:
\[ \text{EOQ} = \sqrt{\frac{2DS}{H}} \]
Where:
- \( D \) is the annual demand: \( D = 85 \times 52 = 4,420 \)
- \( S \) is the ordering cost: \( S = \$55 \)
- \( H \) is the holding cost: \( H = 0.25 \times 11.00 = \$2.75 \)
Calculation:
\[ \text{Sam's optimal order quantity is} \sqrt{\frac{2 \times 4,420 \times 55}{2.75}} = 420 \text{ bags} \]
b. **What would be the average time between orders (in weeks)?**
To find the average time between orders, use:
\[ \text{TBO}_{EOQ} = \frac{\text{EOQ}}{D} \]
Where:
- EOQ = 420 bags
- \( D \) is demand in bags per week = 85
Calculation:
\[ \text{The average time between orders is} \frac{420}{85} = 4.9 \text{ weeks} \]
This calculation indicates that Sam's Cat Hotel should place an order every 4.9 weeks to optimize inventory levels.
![**Reorder Point Calculation**
**b. What should R be?**
The reorder point \( R \) is calculated as:
\[ R = \bar{d}L + \text{Safety Stock}, \]
where \( \bar{d} \) is demand in bags per week, and \( L \) is lead time in weeks.
- \( \bar{d}L = 85 \times 2 = 170 \) bags.
The safety stock is calculated as:
\[ \text{Safety Stock} = z\sigma_{dLT}, \]
where \( \sigma_{dLT} = \sigma_d \sqrt{L} \). \( \sigma_d \) is the standard deviation of weekly demand in bags, and \( L \) is lead time in weeks.
The problem specifies a desired cycle-service level of 99 percent. From the Normal Distribution Chart, \( z \) is determined to be 2.33.
Next, calculate \( \sigma_{dLT} \):
\[ \sigma_{dLT} = \sigma_d \sqrt{L} = 13 \sqrt{2} = 18.38. \]
- The safety stock is \( (2.33 \times 18.38) = 43 \).
Therefore, the reorder point is:
\[ 170 + 43 = 213 \text{ bags}. \]](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F36a81628-4e73-47c6-859d-2f57e4b1f42c%2F9f4a5ab0-0fa5-4cfb-8109-82cb246b25b5%2Fof9jh5e_processed.png&w=3840&q=75)
Transcribed Image Text:**Reorder Point Calculation**
**b. What should R be?**
The reorder point \( R \) is calculated as:
\[ R = \bar{d}L + \text{Safety Stock}, \]
where \( \bar{d} \) is demand in bags per week, and \( L \) is lead time in weeks.
- \( \bar{d}L = 85 \times 2 = 170 \) bags.
The safety stock is calculated as:
\[ \text{Safety Stock} = z\sigma_{dLT}, \]
where \( \sigma_{dLT} = \sigma_d \sqrt{L} \). \( \sigma_d \) is the standard deviation of weekly demand in bags, and \( L \) is lead time in weeks.
The problem specifies a desired cycle-service level of 99 percent. From the Normal Distribution Chart, \( z \) is determined to be 2.33.
Next, calculate \( \sigma_{dLT} \):
\[ \sigma_{dLT} = \sigma_d \sqrt{L} = 13 \sqrt{2} = 18.38. \]
- The safety stock is \( (2.33 \times 18.38) = 43 \).
Therefore, the reorder point is:
\[ 170 + 43 = 213 \text{ bags}. \]
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