= = +E vNo SpacingNormalAavReplaceHeading 1ReuseDictateEditorFilesParagraphStylesEditingReuse FilesVoiceEditorItem SKU A3378 has a demand that is normally distributed during the lead time, with amean of 360 units and standard deviation 9999 of 12. If Hinsdale cannot have stockoutsin more than 10% of the time in any order, how much safety stock should be maintainedand at what reorder point?1. SKU F5402: daily demand is normally distributed with a mean of 16, standarddeviation of 4, lead time is 4days, and must operate at a 95% service level.2. SKU B7319: daily demand is constant at 24 units per day, lead time is normally witha mean of 6 days and standard deviation of 2 days, and must operate at a 95% servicelevel.3. SKU F9004: daily demand is normally distributed with a mean of 21 units and astandard deviation of 3 days.The lead time is also normally distributed with a mean of 4 days, standard deviation of 2days, and a servicelevel of 90% is required.Text Predictions: On100% OO Fit Give Feed.acer#3396&57backspeуifCInmaltctri

ITEM SKUA3378 Average demand during lead time, μ=360 Standard deviation during lead time, σ =12…

Answered: Item SKU A3378 has a demand that is…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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At Matthews Car Repair, customer demand for a certain brand of motor oil is normally distributed with a mean of 15 gallons and a standard deviation of 6 work-days. To be 95% sure that Compact Car Repair will not run out of oil, we should reorder when motor oil in stock is less than _______ gallons. a. 24.9 b. 22.6 c. 23.7 d. 20
Furnco sells secretarial chairs. Annual demand isnormally distributed, with mean of 1,040 chairs and standarddeviation of 50.99 chairs. Furnco orders its chairs from itsflagship store. It costs $100 to place an order, and the leadtime is two weeks. Furnco estimates that each stockoutcauses a loss of $50 in future goodwill. Furnco pays $60 foreach chair and sells it for $100. The annual cost of holdinga chair in inventory is 30% of its purchase cost.a Assuming that all demand is backlogged, what arethe reorder point and the safety stock level? b Assuming that all stockouts result in lost sales, de-termine the optimal reorder point and the safety stock level.
The injection molding department of a company uses an average of 30 gallons of special lubricanta day. The supply of the lubricant is replenished when the amount on hand is 170 gallons. It takesfour days for an order to be delivered. Safety stock is 50 gallons, which provides a stockout risk of9 percent. What amount of safety stock would provide a stockout risk of 3 percent? Assumenormality.
A company stocks an SKU with a weekly demand of 600 units and a lead time of4 weeks. Management will tolerate one stockout per year. If sigma for the lead timeis 100 and the order quantity is 2500 units, what is the safety stock, the averageinventory, and the order point?
The Suregrip Tire Company carries a certain type of tire with the following characteristics:Average annual sales = 600 tiresOrdering cost = $40 per orderCarrying cost = 25 percent per yearItem cost = $50 per tireLead time = 4 daysStandard deviation of daily demand = 1 tirea. Calculate the EOQ.b. For a Q system of inventory control, calculate the safety stock required for service levels of 85, 90, 95, 97, and 99 percent. excelc. Construct a plot of total inventory investment versus service level.d. What service level would you establish on the basis of the graph in part c? Discuss.
The appropriate level of safety stock is typically determined by:a) minimizing an expected stockout cost.b) choosing the level of safety stock that assures a givenservice level.c) carrying sufficient safety stock so as to eliminate allstockouts.d) annual demand.
Given this information:
Reorder PointConsider an economic order quantity case where annual demand D = 1,000 units, economic order quantity Q = 200 units, the desired probability of not stocking out P = .95, the standard deviation of demand during lead time σL = 25 units, and lead time L = 15 days. Determine the reorder point. Assume that demand is over a 250-workday year.
What is the relationship between the average inventory and the in-stock probability?a. The more the inventory, the lower the in-stock probability.b. There isn’t a definitive relationship—more inventory could mean a lower or a higherin-stock probability.c. The more the inventory, the higher the in-stock probability.
Consider again managing inventory for product 101, provided by Supplier A. Recall thatdemand for 101 is approximately d = 200 units per week. You pay a purchase cost p = $500per unit and value your inventory at r = $550 per unit. You estimate your inventory carry-ing cost rate at r = 18% per year; storing one item of product 101 in your DC requires anequivalent rent (storage cost) of s = $10 per unit per year.Use truckload shipping for your orders of product 101; recall then that your total fixedcost (k + F ) = $900 for any order of size no greater than Q = 700 units. You estimate atotal lead time (order processing plus transit time) of 12 days for these shipments.To reduce your logistics costs, you decide that it might be worthwhile to backorder someof the customer demand you face each cycle. When backordering, you will delay your out-bound shipping of some of your customers’ orders. 1. To conduct analysis, you estimate a backordering cost per item b and initially proposeb = $3 per…
The Suregrip Tire Company carries a certain type oftire with the following characteristics:Average annual sales = 600 tiresOrdering cost = $40 per orderCarrying cost = 25 percent per yearItem cost = $50 per tireLead time = 4 daysStandard deviation of daily demand = 1 tirea. Calculate the EOQ.b. For a Q system of inventory control, calculate the safety stock required for service levels of 85, 90, 95,97, and 99 percent.c. Construct a plot of total inventory investment versus service level.d. What service level would you establish on the basis of the graph in part c? Discuss.
Nationwide Auto Parts uses a periodic review inventory control system for one of its stock items. The review interval is 6 weeks, and the lead time for receiving the materials ordered from its wholesaler is 3 weeks. Weekly demand is normally distributed, with a mean of 100 units and a standard deviation of 20 units.a. What is the average and the standard deviation of demand during the protection interval?b. What should be the target inventory level if the firm desires 97.5 percent stockout protection?c. If 350 units were in stock at the time of a periodic review, how many units should be ordered?

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