Muscle Bound is a chain of fitness stores located in many large shopping centers. Recently, an internal memo from the CEO to all operations personnel complained about the budget overruns at Muscle Bound’s central warehouse. In particular, she said that inventories were too high and that the budget will be cut dramatically and proportionately equal for all items in stock. Consequently, warehouse management set up a pilot study to see what effect the budget cuts would have on customer service.They chose 5-pound barbells, which are a high volume SKU and consume considerable warehouse space. Daily demand for the barbells is 1,000 units, with a standard deviation of 150 units. Ordering costs are $40 per order. Holding costs are $2/unit/year. The supplier is located in the Philippines; consequently, the lead time is 35 days with a standard deviation of 5 days. Muscle Bound stores operate 313 days a year (no Sundays). Suppose that the barbells are allocated a budget of $16,000 fortotal annual costs. If Muscle Bound uses a continuous review system for the barbells and cannot change the ordering costs and holding costs or the distributions of demand or lead time, what is the best cycle-service level management can expect from their system?It may be helpful to review MyOMLab Supplement E, “Simulation,”before working on next Problem
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.
Muscle Bound is a chain of fitness stores located in many large shopping centers. Recently, an internal memo from the CEO to all operations personnel complained about the budget overruns at Muscle Bound’s central warehouse. In particular, she said that inventories were too high and that the budget will be cut dramatically and proportionately equal for all items in stock. Consequently, warehouse management set up a pilot study to see what effect the budget cuts would have on customer service.
They chose 5-pound barbells, which are a high volume SKU and consume considerable warehouse space. Daily demand for the barbells is 1,000 units, with a standard deviation of 150 units. Ordering costs are $40 per order. Holding costs are $2/unit/year. The supplier is located in the Philippines; consequently, the lead time is 35 days with a standard deviation of 5 days. Muscle Bound stores operate 313 days a year (no Sundays). Suppose that the barbells are allocated a budget of $16,000 for
total annual costs. If Muscle Bound uses a continuous review system for the barbells and cannot change the ordering costs and holding costs or the distributions of demand or lead time, what is the best cycle-
It may be helpful to review MyOMLab Supplement E, “Simulation,”
before working on next Problem
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