Scotch Pub bar sells Speylachie high-end whiskey among other beverages. The demand for Speylachie is normally distributed. The inventory related information at Scotch Pub is as follows: Average Annual Demand = 2,500 liters Standard deviation of weekly demand = 22 liters One-liter bottle cost = bought at £112.50 per bottle from a brewery in Scotland Ordering cost = £144.00 per order Lead time = 3 weeks Annual inventory-holding cost estimate = 4% of the bottle cost Required service level = 95% Scotch Pub works 50 weeks a year. Note: The approximate z values are: for 0.9 ≈ 1.28, for 0.92 ≈ 1.405, for 0.95 ≈ 1.645, for 0.98 ≈ 2.05. Suppose the bar management practices the fixed-PERIOD ordering system with the review period equal to the “economic time interval”. Answer the following questions: (i) When do they place an order? (ii) If at the time of review there are 333 bottles are available in the stock, how many bottles of Speylachie they will order? (iii) What is the safety stock? Select one: a. (i) an order is placed every 8 weeks (ii) they will order about 615 bottles (iii) the safety stock is about 398 liters b. (i) an order is placed when the inventory in stock reaches about 550 liters (ii) they will order about 400 bottles (iii) the safety stock is about 670 liters c. (i) an order is placed every 11 weeks (ii) they will order about 279 bottles (iii) the safety stock is about 62 liters d. (i) an order is placed every 8 weeks (ii) they will order about 337 bottles (iii) the safety stock is about 120 liters e. (i) an order is placed when the inventory in stock reaches about 670 liters (ii) they will order about 337 bottles (iii) the safety stock is about 120 liters
Scotch Pub bar sells Speylachie high-end whiskey among other beverages. The demand for Speylachie is
- Average Annual Demand = 2,500 liters
- Standard deviation of weekly demand = 22 liters
- One-liter bottle cost = bought at £112.50 per bottle from a brewery in Scotland
- Ordering cost = £144.00 per order
- Lead time = 3 weeks
- Annual inventory-holding cost estimate = 4% of the bottle cost
- Required service level = 95%
- Scotch Pub works 50 weeks a year.
Note: The approximate z values are: for 0.9 ≈ 1.28, for 0.92 ≈ 1.405, for 0.95 ≈ 1.645, for 0.98 ≈ 2.05.
Suppose the bar management practices the fixed-PERIOD ordering system with the review period equal to the “economic time interval”. Answer the following questions:
(i) When do they place an order?
(ii) If at the time of review there are 333 bottles are available in the stock, how many bottles of Speylachie they will order?
(iii) What is the safety stock?
(i) an order is placed every 8 weeks
(ii) they will order about 615 bottles
(iii) the safety stock is about 398 liters
(i) an order is placed when the inventory in stock reaches about 550 liters
(ii) they will order about 400 bottles
(iii) the safety stock is about 670 liters
(i) an order is placed every 11 weeks
(ii) they will order about 279 bottles
(iii) the safety stock is about 62 liters
(i) an order is placed every 8 weeks
(ii) they will order about 337 bottles
(iii) the safety stock is about 120 liters
(i) an order is placed when the inventory in stock reaches about 670 liters
(ii) they will order about 337 bottles
(iii) the safety stock is about 120 liters
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