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
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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.
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:

\[ 170 + 43 = 213 \text{ bags}. \]
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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