Problem 2. The annual demand for a specific product is 3,500 units and has the following ordering and holding costs: Co = $20.50 per order and C₁ = $8.00 per unit. Demand exhibits some variability such that the lead-time demand follows a normal probability distribution with µ = 45 units and σ = 12 units. Answer the next questions, Problem 2 parts a - f. Attach your Excel file in Problem 2g. Problem 2a. What is the recommended order quantity for this product? Express your answer as a whole number using standard rounding rules. Problem 2b Order Quantity = units If the manager sets the reorder point at 55 units, what is the probability of a stockout in any given order cycle? Express your answer as a decimal to 4 decimal places using standard rounding rules. Probability of a stockout = Problem 2c. ( Given the probability of a stockout in problem 2b, how many times would expect a stockout to occur during the year if the reorder point = 55 units were used? Express your answer to 2 decimal places using standard rounding rules. Number of order cycles with a stockout = order cycles
Problem 2. The annual demand for a specific product is 3,500 units and has the following ordering and holding costs: Co = $20.50 per order and C₁ = $8.00 per unit. Demand exhibits some variability such that the lead-time demand follows a normal probability distribution with µ = 45 units and σ = 12 units. Answer the next questions, Problem 2 parts a - f. Attach your Excel file in Problem 2g. Problem 2a. What is the recommended order quantity for this product? Express your answer as a whole number using standard rounding rules. Problem 2b Order Quantity = units If the manager sets the reorder point at 55 units, what is the probability of a stockout in any given order cycle? Express your answer as a decimal to 4 decimal places using standard rounding rules. Probability of a stockout = Problem 2c. ( Given the probability of a stockout in problem 2b, how many times would expect a stockout to occur during the year if the reorder point = 55 units were used? Express your answer to 2 decimal places using standard rounding rules. Number of order cycles with a stockout = order cycles
A First Course in Probability (10th Edition)
10th Edition
ISBN:9780134753119
Author:Sheldon Ross
Publisher:Sheldon Ross
Chapter1: Combinatorial Analysis
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Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...
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Transcribed Image Text:Problem 2. The annual demand for a specific product is 3,500 units and has the
following ordering and holding costs: Co = $20.50 per order and C₁ = $8.00 per unit.
Demand exhibits some variability such that the lead-time demand follows a normal
probability distribution with µ = 45 units and σ = 12 units.
Answer the next questions, Problem 2 parts a - f. Attach your Excel file in Problem
2g.
Problem 2a.
What is the recommended order quantity for this product?
Express your answer as a whole number using standard rounding rules.
Problem 2b
Order Quantity =
units
If the manager sets the reorder point at 55 units, what is
the probability of a stockout in any given order cycle? Express your answer as a
decimal to 4 decimal places using standard rounding rules.
Probability of a stockout =
Problem 2c. (
Given the probability of a stockout in problem 2b, how
many times would expect a stockout to occur during the year if the reorder point =
55 units were used? Express your answer to 2 decimal places using standard
rounding rules.
Number of order cycles with a stockout =
order cycles
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