Mr. Beautiful, an organization that sells weight training sets, has an ordering cost of $45 for the BB-1 set (BB-1 stands for Body Beautiful Number 1). The carrying costfor BB-1 is $18 per set per year. To meet demand, Mr. Beautiful orders large quantities of BB-1 7 times a year. The stockout cost for BB-1 is estimated to be $40 perset. Over the past several years, Mr. Beautiful has observed the following demand during the lead time for BB-1:Demand During Lead TimeProbability100.1200.2300.2400.2500.2600.1The reorder point for BB-1 is 30 sets. What level of safety stock should be maintained for BB-1?The optimal quantity of safety stock which minimizes expected total cost issets (enter your response as a whole number).

In the question, given that stock out costs per set =40, the carrying costs per set per year=18,…

Answered: The reorder point for BB-1 is 30 sets.…

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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Popular Company places 10 orders per year with its supplier. Each order is for an amount exactly equal to the EOQ. Popular’s order cost has been determined to be $50 per order. Popular carries no safety stock at all. What is Popular’s order cost per order?
A service garage uses 204 boxes of cleaning cloths a year. The boxes cost $12 each. The cost to place one order is $15, and the cost to hold one box in inventory for a year is $2.40." If the owner of the service garage in the previous question orders the EOQ, instead of 12 boxes at a time, how much will he save?
Walmart experiences a demand of 5 units per day for its LED TVs. The lead time for re-stocking LED TVs is 10 days. What is the Re-Order Point? (Assume that the demand and lead time are known with certainty, that is, they are not uncertain) 50 units 2 units 50 days 2 days
18) The demand for an electronic component is normally distributed with an average daily demand of 500 units, and a standard deviation of 50. The lead time for the component is 9 days. If the company sets a reorder point of 4,650 for this component then its service level is approximately Group of answer choices 50 percent 92 percent 98 percent 84 percent
Consider the basic EOQ model. Annual holding cost (AHC) is $2,400. Optimal cycle time (time between orders, T*) is 3 months. Find ordering cost per order (S). $400 per order $600 per order $2,400 per order Cannot be calculated $9,600 per order
Daily demand for a product is 138 units, with a standard deviation of 36 units. The review period is 10 days and the lead time is 6 days. At the time of review, 58 units are in stock. If 98% service probability is desired (corresponding z = 2.05), how many units should be ordered? (please rounded to integer)
Dave’s local college football team is playing for the national championship in next month’s bowl game, and he’s thinking about having “We’re number one” T-shirts imprinted in honor of the team. It’s too late to get the shirts before game day, but if he orders today, he can get them within a few days after the game. The shirts must be ordered in multiples of 1000, and Dave has estimated the amount of profit he will make for possible outcomes of the game. Given the following payoff table, what will Dave do if he uses the maximin criterion? The maximax criterion? The minimax regret criterion? Order no shirts $0 wins $0 loses $0 ties Order 1000 shirts $800 wins $-200 loses $200 ties Order 2000 shirts $1600 wins $-400 loses $300 ties
In the basic EOQ model, the average inventory level is equal to one-half this value: * Maximum inventory level.Order quantity.Reorder pointBoth A and B.
The weekly demand for a product is 770 units. The standard deviation of dailydemand is 10 units. The firm reviews its inventory every 28 days. Each order for the product arrives 9 days after placement. At the time of review, there are 10 units backorder. If 95 percent of all demand is to be satisfied from items in stock:a) How many units should be the safety stock?b) What’s the product’s inventory status?c) How many units should be ordered for this period?
The electrolyte drink for our beloved NMSU soccer team average normally distributed demand of 5 units and a standard deviation of 1 unit. Lead time for replenishment is fixed at four days. (a) What is the reorder point if there is no safety stock? (b) What is the reorder point if the service level is 80 percent? (c) How much more safety stock is required if the service level is raised from 80 percent to 90 percent?
When an firm put aside some extra inventory that serves as an insurance against flucation in demand is called Wastage Inventory O Minimum Level Safety Stock EOQ
Pizza Hut purchases its pizza delivery boxes from a printing supplier. Pizza Hut delivers on average 350 pizzas each month (assume deterministic demand). Boxes cost 41 cents each, and each order costs $15.50 to process. Because of limited storage space, the manager wants to charge inventory holding at 21 percent of the cost. The lead time is 5 days. Use the EOQ Model Excel template in to determine the economic order quantity.

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The reorder point for BB-1 is 30 sets. What level of safety stock should be maintained for BB-1? The optimal quantity of safety stock which minimizes expected total cost is | sets (enter your response as a whole number).