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Sam's Cat Hotel operates 51 weeks per year, 6 days per week. It purchases kitty litter for $7.00 per bag. The following information is available about these bags: > Demand = 60 bags/week > Order cost = $70/order > Annual holding cost = 25 percent of cost > Desired cycle-service level = 99 percent > Lead time = 1 week(s) (6 working days) > Standard deviation of weekly demand = 5 bags > Current on-hand inventory is 275 bags, with no open orders or backorders. Suppose that Sam's Cat Hotel uses a P system. The average daily demand, d, is 10 bags (60/6), and the standard deviation of daily demand, Standard Deviation of Weekly Demand is 2.041 bags. Refer to the standard normal table for z-values. VDays per Week a. What P (in working days) and T should be used to approximate the cost trade-offs of the EOQ? The time between orders, P, should be days. (Enter your response rounded to the nearest whole number.)

Sam's Cat Hotel operates 51 weeks per year, 6 days per week. It purchases kitty litter for $7.00 per bag. The following information is available about these bags: > Demand = 60 bags/week > Order cost = $70/order > Annual holding cost = 25 percent of cost > Desired cycle-service level = 99 percent > Lead time = 1 week(s) (6 working days) > Standard deviation of weekly demand = 5 bags > Current on-hand inventory is 275 bags, with no open orders or backorders. Suppose that Sam's Cat Hotel uses a P system. The average daily demand, d, is 10 bags (60/6), and the standard deviation of daily demand, Standard Deviation of Weekly Demand is 2.041 bags. Refer to the standard normal table for z-values. VDays per Week a. What P (in working days) and T should be used to approximate the cost trade-offs of the EOQ? The time between orders, P, should be days. (Enter your response rounded to the nearest whole number.)

Practical Management Science
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...
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1.

a. What P​ (in working​ days) and T should be used to approximate the cost​ trade-offs of the​ EOQ?

 

The time between​ orders, P, should be______days. ​(Enter your response rounded to the nearest whole​ number.)

 

The target​ inventory, T, should be _______bags. ​(Enter your response rounded to the nearest whole​ number.)

 

b. How much more safety stock is needed than with a Q​ system?______bags. ​(Enter your response rounded to the nearest whole​ number.)

 

c. It is time for the periodic review. How much kitty litter should be​ ordered?________bags. ​(Enter your response as an​ integer.)

 

 

 

Sam's Cat Hotel operates 51 weeks per year, 6 days per week. It purchases kitty litter for $7.00 per bag. The following information is available about these bags: > Demand = 60 bags/week > Order cost = $70/order > Annual holding cost = 25 percent of cost > Desired cycle-service level = 99 percent > Lead time > Standard deviation of weekly demand = 5 bags > Current on-hand inventory is 275 bags, with no open orders or backorders. = 1 week(s) (6 working days) Suppose that Sam's Cat Hotel uses a P system. The average daily demand, d, is 10 bags (60/6), and the standard deviation of daily demand, Standard Deviation of Weekly Demand is 2.041 bags. Refer to the standard normal table for z-values. Days per Week a. What P (in working days) and T should be used to approximate the cost trade-offs of the EOQ? The time between orders, P, should be days. (Enter your response rounded to the nearest whole number.)
Transcribed Image Text:Sam's Cat Hotel operates 51 weeks per year, 6 days per week. It purchases kitty litter for $7.00 per bag. The following information is available about these bags: > Demand = 60 bags/week > Order cost = $70/order > Annual holding cost = 25 percent of cost > Desired cycle-service level = 99 percent > Lead time > Standard deviation of weekly demand = 5 bags > Current on-hand inventory is 275 bags, with no open orders or backorders. = 1 week(s) (6 working days) Suppose that Sam's Cat Hotel uses a P system. The average daily demand, d, is 10 bags (60/6), and the standard deviation of daily demand, Standard Deviation of Weekly Demand is 2.041 bags. Refer to the standard normal table for z-values. Days per Week a. What P (in working days) and T should be used to approximate the cost trade-offs of the EOQ? The time between orders, P, should be days. (Enter your response rounded to the nearest whole number.)
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