() The reorder point (whole number) - copies (9) Total annual stocking cost (two decimal points with no commas) - $
() The reorder point (whole number) - copies (9) Total annual stocking cost (two decimal points with no commas) - $
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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Question
ANSWER F AND G
![A publishing Company produces books for the retail market. Demand for a current book is expected to occur at a
constant annual rate of 7500 copies. The cost of one copy of the book is $27.50. The holding cost is based on 18%
annual rate, and production setup costs are $550.00. The equipment on which the book is produced has an annual
production volume of 21,000 copies. The Company uses 250 working days per year and the lead time for a
production run is 12 days. Assume the company is willing to tolerate one stock-out per year and that the lead time
demand follows a normal distribution with a standard deviation of 75 copies.
Using an appropriate Fixed Order Quantity system model compute the following:
(a) Minimum cost production lot size (whole number with no commas) -
copies
(b) Number of production runs per year (two decimal points) -
runs
(c) Cycle time (two decimal points) -
days
(d) Length of production run (two decimal points) -
days
(e) Maximum inventory (use the closest Z value, answer whole number) -
copies
(f) The reorder point (whole number) -
copies
(g) Total annual stocking cost (two decimal points with no commas) - $](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fcfbf8456-ba88-4544-ada4-19268bb1d390%2Fbaf0570f-8bd4-4087-8549-3d744e451144%2F7ew54oq_processed.png&w=3840&q=75)
Transcribed Image Text:A publishing Company produces books for the retail market. Demand for a current book is expected to occur at a
constant annual rate of 7500 copies. The cost of one copy of the book is $27.50. The holding cost is based on 18%
annual rate, and production setup costs are $550.00. The equipment on which the book is produced has an annual
production volume of 21,000 copies. The Company uses 250 working days per year and the lead time for a
production run is 12 days. Assume the company is willing to tolerate one stock-out per year and that the lead time
demand follows a normal distribution with a standard deviation of 75 copies.
Using an appropriate Fixed Order Quantity system model compute the following:
(a) Minimum cost production lot size (whole number with no commas) -
copies
(b) Number of production runs per year (two decimal points) -
runs
(c) Cycle time (two decimal points) -
days
(d) Length of production run (two decimal points) -
days
(e) Maximum inventory (use the closest Z value, answer whole number) -
copies
(f) The reorder point (whole number) -
copies
(g) Total annual stocking cost (two decimal points with no commas) - $
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