The demand for a particular part called SKU 005 is 1,200 units a year. The cost of one SKU 005 is$40.00. It costs $60.00 to place an order SKU 005, and the user of SKU 005 has a per year inventorycarrying cost of 25% of unit cost. Assume that there are 250 working days in the year where SKU 005is used.Once the purchasing manager for SKU 005 places an order, it always takes the vendor 5 working daysto deliver that order. What should the purchasing manager's reorder point be?O A. 24O B. 36O C. 30O D. 5O E. 12

Answered: The demand for a particular part called…

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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RoyalTech's South Jersey warehouse faces a daily demand that is normally distributed, with mean 1,000 and standard deviation 100 pallets. RoyalTech's supplier has a lead-time that is normally distributed, with mean 5 days and standard deviation 1 day. RoyalTech reviews its inventory periodically, that is, every 7 days. (Hint: think about the inventory model appropriate here) RoyalTech's warehouse runs 365 days a year, and the cost of carrying inventory is 18.25% per year. The supplier charges RoyalTech $2,000 per pallet, and $5,000 per delivery. RoyalTech plans to maintain 98% SL. NORMSINV(0.98) = 2.054. L(2.054) = 0.0073. Answer the following questions. 1. How much safety stock should Royal Tech carry? [Select] v pallets. 2. What is RoyalTech's average inventory? [ Select ] pallets. 3. What is the total relevant cost incurred by RoyalTech per day? $ [ Select] 4. What is the Fill Rate that RoyalTech is able to achieve for this service level? [ Select ]
Wood County Hospital consumes 1,500 boxes of bandages per week. The price of bandages is $36 per box, and the hospital operates 52 weeks per year. The cost of processing an order is $15, and the cost of holding one box for a year is 20 percent of the value of the material. a. The hospital orders bandages in lot sizes of 900 boxes. What extra cost does the hospital incur, which it could save by using the EOQ method? $ 435.37 (Enter your response rounded to two decimal places.) b. Demand is normally distributed, with a standard deviation of weekly demand of 150 boxes. The lead time is 2 weeks. Refer to the standard normal table for z-values. What safety stock is necessary if the hospital uses a continuous review system and a 95 percent cycle-service level is desired? 348 boxes. (Enter your response rounded to the nearest whole number.) What should be the reorder point? boxes. (Enter your response rounded to the nearest whole number.) pm oints
The excess cost of an item is the profit you would have made on it. True False
A National chain of type fitters stocks a popular type for which the following information is available. The company operates on 50-week year and Normally operates from Monday to Friday only. Average usage 140 types per day Minimum usage 90 types per day Maximum usage 175 types per day Lead time 10 to 16 days Reorder quality 3000 Cost per types n$1500 Holding cost per unit 3% of unit cost Ordering cost per year n$75.50 Calculate the ordinary coat based on the current reorder quantity?
A gift shop sells 400 boxes of scented candles a year. The ordering cost is $50 for scented candles, and holding cost is $25 per box per year. What is the economic order size for scented candles?
Develop a measure of risk to go along with the ordering policy. This measure should be quantifiable.
The demand for a particular part called SKU 005 is 1,500 units a year. The cost of one SKU 005 is $64.00. It costs $60.00 to place an order SKU 005, and the user of SKU 005 has a per year inventory carrying cost of 25% of unit cost. Assume that there are 250 working days in the year where SKU 005 is used. Once the purchasing manager for SKU 005 places an order, it always takes the vendor 5 working days to deliver that order. What should the purchasing manager’s reorder point be? ) A. 12 ОВ. 30 Ос. 36 O D. 24 O E. 5
ABC analysis is based on the presumption that carefully controlling all items is necessary to produce important inventory savings. A True B False
Suppose you have a very critical part that is used in the production of your product (so critical that it is impossible to continue production unless it is present). For such a part which of the two inventory control systems could you prefer?: Fixed Order Quantity or Fixed Order Period. Why? Explain briefly
SKU One is sold at retail store for $8 per unit. SKU One has a weekly demand of 975 units with an average lead time of 5 weeks and a standard deviation of lead time of 2 weeks. Based on the information and a 95% service level, what is the reorder point for SKU One? please show work how to solve

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