Maynard Shoe Co. produces and sells an excellent-quality walking shoe. After production, the shoes are distributed to 20 warehouses around the country. Each warehouse services approximately 100 stores in its region. Maynard uses an EOQ model to determine the number of pairs of shoes to order for each warehouse from the factory. Annual demand for warehouse OR2 is approximately 132,000 pairs of shoes. The ordering cost is $264 per order. The annual carying cost of a pair of shoes is $2.50 per pair. Read the reuirements O Requirements rder, C- Carying cost of one unit in stock. O- Any order quanty 1. Use the EOQ model to determine the optimal number of pairs of shoes per order. 2. Assume each month consists of approximately 4 weeks. Ifit takes 1 week to receive an order, at what point should warehouse OR2 reorder shoes? 3. Athough ORZS average weekly demand is 2,750 pairs of shoes (132.000 - 12 months +4 weeks), demand each week may vary with the following probability distribution: Total demand for 1 week 2.000 pairs 1,050 pairs 2,750 pairs 2.970 pairs 3,200 pairs nt should warehouse OR2 reorder shoes? Probability (sums to 1.00) 0.02 0.10 0.76 0.10 0.02 er point. Ifa store wants shoes and OR2 has none in stock, OR2 can "rush them to the store at an additional cost of $4 per pair. How much safety stock should Warehouse OR2 hold? How will this affect the reorder point and reorder quantity?
Maynard Shoe Co. produces and sells an excellent-quality walking shoe. After production, the shoes are distributed to 20 warehouses around the country. Each warehouse services approximately 100 stores in its region. Maynard uses an EOQ model to determine the number of pairs of shoes to order for each warehouse from the factory. Annual demand for warehouse OR2 is approximately 132,000 pairs of shoes. The ordering cost is $264 per order. The annual carying cost of a pair of shoes is $2.50 per pair. Read the reuirements O Requirements rder, C- Carying cost of one unit in stock. O- Any order quanty 1. Use the EOQ model to determine the optimal number of pairs of shoes per order. 2. Assume each month consists of approximately 4 weeks. Ifit takes 1 week to receive an order, at what point should warehouse OR2 reorder shoes? 3. Athough ORZS average weekly demand is 2,750 pairs of shoes (132.000 - 12 months +4 weeks), demand each week may vary with the following probability distribution: Total demand for 1 week 2.000 pairs 1,050 pairs 2,750 pairs 2.970 pairs 3,200 pairs nt should warehouse OR2 reorder shoes? Probability (sums to 1.00) 0.02 0.10 0.76 0.10 0.02 er point. Ifa store wants shoes and OR2 has none in stock, OR2 can "rush them to the store at an additional cost of $4 per pair. How much safety stock should Warehouse OR2 hold? How will this affect the reorder point and reorder quantity?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
i need the solution for the two blanks in requirement 3. the safety stock ____ pairs & the reorder point _____ pairs of shoes.
Check the image for requirement 3 as i alreacy have most blanks filled out
Transcribed Image Text:Maynard Shoe Co. produces and sells an excellent-quality walking shoe. After production, the shoes are distributed to 20 warehouses around the country. Each warehouse services
approximately 100 stores in its region. Maynard uses an EOQ model to determine the number of pairs of shoos to order for each warehouse from the factory. Annual demand for warehouse
OR2 is approximately 132,000 pairs of shoes. The ordering cost is $264 per order. The annual carrying cost of a pair of shoes is $2.50 per pair.
Read the reguirements.
O Requirements
prder, C- Carrying cost of one unit in stock, Q- Any order quantity.)
1. Use the EOQ model to determine the optimal number of pairs of shoes per order.
2. Assume each month consists of approximately 4 weeks. If it takes 1 week to receive an order, at what point
should warehouse OR2 reorder shoes?
3. Athough ORZ's average weekly demand is 2,750 pairs of shoes (132,000 - 12 months + 4 weeks), demand
each week may vary with the following probability distribution:
Total demand for 1 week
2,000 pairs 1,050 pairs 2,750 pairs 2,070 pairs
3,260 paira
int should warehouse OR2 reorder shoes?
Probability (sums to 1.00)
0.02
0.10
0.76
0.10
0.02
Ser point.
Ifa store wants shoes and OR2 has none in stock, OR2 can "rush" them to the store at an additional cost of $4
per pair. How much safety stock should Warehouse OR2 hold? How will this affect the reorder point and reorder
quantity?
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