Problem 11-19 (Algo) The annual demand for a product is 15,000 units. The weekly demand is 288 units with a standard deviation of 80 units. The cost to place an order is $32.00, and the time from ordering to receipt is six weeks. The annual inventory carrying cost is $0.10 per unit. a. Find the reorder point necessary to provide a 90 percent service probability. Note: Use Excel's NORM.S.INV() function to find the z value. Round z value to 2 decimal places. Reorder point units b. Suppose the production manager is asked to reduce the safety stock of this item by 45 percent. If she does so, what will the new service probability be? Note: Use Excel's NORM.S.DIST() function to find the correct probability for your computed z value. Round "z" value to 2 decimal places and final answer to 1 decimal place. Service probability %
Problem 11-19 (Algo) The annual demand for a product is 15,000 units. The weekly demand is 288 units with a standard deviation of 80 units. The cost to place an order is $32.00, and the time from ordering to receipt is six weeks. The annual inventory carrying cost is $0.10 per unit. a. Find the reorder point necessary to provide a 90 percent service probability. Note: Use Excel's NORM.S.INV() function to find the z value. Round z value to 2 decimal places. Reorder point units b. Suppose the production manager is asked to reduce the safety stock of this item by 45 percent. If she does so, what will the new service probability be? Note: Use Excel's NORM.S.DIST() function to find the correct probability for your computed z value. Round "z" value to 2 decimal places and final answer to 1 decimal place. Service probability %
Chapter18: The Management Of Accounts Receivable And Inventories
Section: Chapter Questions
Problem 19P
Related questions
Question
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Recommended textbooks for you
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning