Pipeline Inventory Cost Per Time = d(tt * rv) (F+ k)d TC(q)/T = +d(p+c+tt rv) + + (8+ 7727) 9 q* = min 2Fd 2s+rv Imax S = d(T+TL) + $¯¹ (Pa)¤¿√T+TL) S = d(T+TL) + ss S = d(T + µL) + §¯¹ (Pa) √√ o² (T + µL) +ð²o² R = dTL + $¯¹(pa)σd√√TL You make inventory replenishment decisions for your Marietta distribution center. You pur- chase lawnmowers from Honda which you store in inventory until you sell them to retailers in the Atlanta area. For years, you have promised to ship your customer orders immediately directly from inventory. Each lawnmower you purchase costs $100, and you value inventory (v) at the purchase cost. Assume that your inventory carrying cost is r = 20% per year. Storage cost per year per lawnmower are estimated at $25 for dedicated storage. Honda needs 2 weeks to prepare your order, then ships by LTL transportation. Honda charges you a fixed ordering cost of $200 each time you order, and the LTL transport cost is $20 per mower.
Pipeline Inventory Cost Per Time = d(tt * rv) (F+ k)d TC(q)/T = +d(p+c+tt rv) + + (8+ 7727) 9 q* = min 2Fd 2s+rv Imax S = d(T+TL) + $¯¹ (Pa)¤¿√T+TL) S = d(T+TL) + ss S = d(T + µL) + §¯¹ (Pa) √√ o² (T + µL) +ð²o² R = dTL + $¯¹(pa)σd√√TL You make inventory replenishment decisions for your Marietta distribution center. You pur- chase lawnmowers from Honda which you store in inventory until you sell them to retailers in the Atlanta area. For years, you have promised to ship your customer orders immediately directly from inventory. Each lawnmower you purchase costs $100, and you value inventory (v) at the purchase cost. Assume that your inventory carrying cost is r = 20% per year. Storage cost per year per lawnmower are estimated at $25 for dedicated storage. Honda needs 2 weeks to prepare your order, then ships by LTL transportation. Honda charges you a fixed ordering cost of $200 each time you order, and the LTL transport cost is $20 per mower.
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...
Related questions
Question
1. Suppose that you decide to order lawnmowers from Honda every ̄T = 3 weeks. Suppose that
you estimate that your average weekly demand for mowers is 75, and that the variance in
demand is 100 mowers2 per week. If the LTL transportation takes an additional 1 week (such
that TL = 3 weeks), how much safety stock should you hold in Marietta if Φ−1(pα) = 2.5?
you estimate that your average weekly demand for mowers is 75, and that the variance in
demand is 100 mowers2 per week. If the LTL transportation takes an additional 1 week (such
that TL = 3 weeks), how much safety stock should you hold in Marietta if Φ−1(pα) = 2.5?
2. What is the weekly cost of holding this much safety stock (carrying cost plus storage cost)?
3. Suppose you switched to continuous review inventory policy where you placed an order when-
ever your inventory position reached level R. How much safety stock should you now hold in
Marietta, and what is the weekly cost of this stock?
ever your inventory position reached level R. How much safety stock should you now hold in
Marietta, and what is the weekly cost of this stock?
Transcribed Image Text:Pipeline Inventory Cost Per Time = d(tt * rv)
(F+ k)d
TC(q)/T =
+d(p+c+tt rv) +
+ (8+ 7727) 9
q* = min
2Fd
2s+rv
Imax
S = d(T+TL) + $¯¹ (Pa)¤¿√T+TL)
S = d(T+TL) + ss
S = d(T + µL) + §¯¹ (Pa) √√ o² (T + µL) +ð²o²
R = dTL + $¯¹(pa)σd√√TL
Transcribed Image Text:You make inventory replenishment decisions for your Marietta distribution center. You pur-
chase lawnmowers from Honda which you store in inventory until you sell them to retailers in the
Atlanta area. For years, you have promised to ship your customer orders immediately directly from
inventory.
Each lawnmower you purchase costs $100, and you value inventory (v) at the purchase cost.
Assume that your inventory carrying cost is r = 20% per year. Storage cost per year per lawnmower
are estimated at $25 for dedicated storage.
Honda needs 2 weeks to prepare your order, then ships by LTL transportation. Honda charges
you a fixed ordering cost of $200 each time you order, and the LTL transport cost is $20 per mower.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
Practical Management Science
Operations Management
ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,
Operations Management
Operations Management
ISBN:
9781259667473
Author:
William J Stevenson
Publisher:
McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi…
Operations Management
ISBN:
9781259666100
Author:
F. Robert Jacobs, Richard B Chase
Publisher:
McGraw-Hill Education
Practical Management Science
Operations Management
ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,
Operations Management
Operations Management
ISBN:
9781259667473
Author:
William J Stevenson
Publisher:
McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi…
Operations Management
ISBN:
9781259666100
Author:
F. Robert Jacobs, Richard B Chase
Publisher:
McGraw-Hill Education
Purchasing and Supply Chain Management
Operations Management
ISBN:
9781285869681
Author:
Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:
Cengage Learning
Production and Operations Analysis, Seventh Editi…
Operations Management
ISBN:
9781478623069
Author:
Steven Nahmias, Tava Lennon Olsen
Publisher:
Waveland Press, Inc.