### Inventory Management Problem**Problem Statement:**Weekly demand for DVD-Rs at a retailer is normally distributed with a mean of 1,000 boxes and a standard deviation of 150 boxes. Currently, the store places orders with a supplier with a reorder point of 4,200 boxes. The order quantity to the supplier is fixed at 5,000 boxes. The replenishment lead time is 4 weeks. The fixed order cost per order is $100, and each box costs the retailer $10. The inventory holding cost is 25% per year.**Objective:**Calculate the order-up-to level $ S $ that the retailer should use as a baseline during periodic reviews, given the order quantity of 5,000 boxes and a reorder point of 4,200 boxes.**Numerical Input:**- **Response:** 1500This text appears as part of a larger educational module on inventory management, guiding users through understanding and calculating key logistic and supply chain metrics. ### Inventory Management Problem#### Problem Statement:Weekly demand for DVD-Rs at a retailer is normally distributed with a mean of 1,000 boxes and a standard deviation of 150. Currently, the store places orders to the supplier with a reorder point of 4,200 boxes. The order quantity to the supplier is fixed at 5,000 boxes. Additional details include:- Replenishment lead time: 4 weeks- Fixed order cost per order: $100- Cost per box: $10- Inventory holding cost: 25% per yearWith an assumption of 50 weeks in a year, determine the optimal order quantity the retailer should order.#### Response Section:- **Numeric Response:** 2040The problem requires the application of inventory management concepts to calculate the economic order quantity (EOQ) based on the given parameters, such as demand rate, lead time, and various costs associated.

Answered: Image /qna-images/answer/d1a68cd8-3ccb-4f9b-b250-f0d33fdd7a68.jpg

Answered: Weekly demand for DVD-Rs at a retailer…

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...

See similar textbooks

Similar questions

Paulin’s muffler shop has one standard muffler that fits a large variety of cars. The shop wishes to establish a periodic review system to manage inventory of this standard muffler. Use the information table to determine the optimal inventory target level (or order-up to level). Annual demand 3,910 mufflers ordering cost $75 per order S/D of daily demand 6 mufflers/wk. day service probability 87% Item cost $ 27.00 per muffler lead time 2 wk. Days Annual holding cost 36 % of item value wk. Days 230 per year Review period 18 working days What is the optimal target levels (order up to levels) use excels NORMSINVI() function to find the correct critical value for the given a-level. Do not round intermediate calculations. Round value 2 decimal places and final answer to the nearest whole number If the service probability is 90%, the optimal target level will increase, decrease or…
A daily newspaper is stocked by a coffee shop so its patrons can purchase and read it while they drink coffee. The newspaper costs $1.17 per unit and sells for $1.75 per unit. If units are unsold at the end of the day, the supplier takes them back at a rebate of $1 per unit. Assume that daily demand is approximately normally distributed with μ = 150 and a = 30. (a) What is your recommended daily order quantity for the coffee shop? (Round your answer to the nearest integer.) (b) What is the probability that the coffee shop will sell all the units it orders? (Round your answer to four decimal places.) (c) In problems such as these, why would the supplier offer a rebate as high as $1? For example, why not offer a nominal rebate? Find the recommended order quantity at 25¢ per unit. (Round your answer to the nearest integer.) What happens to the coffee shop's order quantity as the rebate is reduced? The higher rebate ---Select-- the quantity that the coffee shop should order.
A retailer anticipates selling 5,400 units of its product at a uniform rate over the next year. Each time the retailer places an order for æ units, it charged a flat fee of $100. Carrying costs are $27 per unit per year. How many times should the retailer reorder each year and what should be the lot size to minimize inventory costs? What is the minimum inventory cost? Use the formula EOQ to obtain your answers. They should order units The minimum inventory cost is $ times a year.
An engineer has decided to pursue ordering option for a particular item on an as needed basis as oppose to stocking it. To stock the item, inventory inspection costs $500 annually. The cost to place an order is estimated at $125. For the ordering option, there is an additional $85 special delivery charge per order. Demand for the $20 item is 2,300 units per year. The annual holding cost rate is 40% of the item price. Calculate range of the order quantity that will make it economical to order this item every time. If the engineer decides to stock the item what is the order quantity that is economical.
Palin’s Muffler Shop has one standard muffler that fits a large variety of cars. The shop wishes to establish a periodic review system to manage inventory of this standard muffler. Use the information in the following table to answer the below questions. Annual demand 3,000 mufflers Standard deviation of daily demand 6 mufflers per working day Item cost $30 per muffler Annual holding cost 25% of item value Review period 15 working days Ordering cost $50 per order Service probability 90% Lead time 2 working days Working days 300 per year What is the optimal target level (order-up-to level)? Note: Use Excel's NORM.S.INV() function to find the z value. Round z value to 2 decimal places and final answer to the nearest whole number. If the service probability requirement is 95 percent, the optimal target level will: multiple choice Increase Decrease Stay the same
Please do not give solution in image format thanku
Thomas Kratzer is the purchasing manager for the headquarters of a large insurance company chain with a central inventory operation. Thomas's fastest-moving inventory item has a demand of 5,900 units per year. The cost of each unit is $101, and the inventory carrying cost is $11 per unit per year. The average ordering cost is $31 per order. It takes about 5 days for an order to arrive, and the demand for 1 week is 118 units. (This is a corporate operation, and there are 250 working days per year). a) What is the EOQ? units (round your response to two decimal places). b) What is the average inventory if the EOQ is used? c) What is the optimal number of orders per year? d) What is the optimal number of days in between any two orders? decimal places). units (round your response to two decimal places). orders (round your response to two decimal places). days (round your response to two e) What is the annual cost of ordering and holding inventory? $ decimal places). per year (round your…
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
The Hodson Gallery and Art Museum distributes a printed guide for its visitors. There are about 18000 visitors per year. Holding costs for the brochures are 20% and it costs $30 to place an order with the printer. A. Assuming the cost for each guide is $2.50, how many should be printed at a time? B. Now assume the printer has offered the following discount schedule: Category Order Size Unit Cost 1 0 - 1499 $2.50 2 1500 - 2999 $2.20 3 3000 and over $1.80 Now how many brochures should be printed at a time?
Peter operates an ice cream shop and needs to order milk from a dairy supplier. The average daily milk consumption is 9 gallons, and the standard deviation is 2 gallons. The delivery time is 3 days on average, with a standard deviation = 1 day. Peter can place an order at any time, and he decides the order quantity = 100 gallons. What is the reorder point if he wants to keep the 95% service level?

Recommended textbooks for you

Practical Management Science

Operations Management

ISBN:

9781337406659

Author:

WINSTON, Wayne L.

Publisher:

Cengage,

Operations Management

ISBN:

9781259667473

Author:

William J Stevenson

Publisher:

McGraw-Hill Education

Operations and Supply Chain Management (Mcgraw-hi…

Operations Management

ISBN:

9781259666100

Author:

F. Robert Jacobs, Richard B Chase

Publisher:

McGraw-Hill Education

Practical Management Science

Operations Management

ISBN:

9781337406659

Author:

WINSTON, Wayne L.

Publisher:

Cengage,

Operations Management

ISBN:

9781259667473

Author:

William J Stevenson

Publisher:

McGraw-Hill Education

Operations and Supply Chain Management (Mcgraw-hi…

Operations Management

ISBN:

9781259666100

Author:

F. Robert Jacobs, Richard B Chase

Publisher:

McGraw-Hill Education

Business in Action

Operations Management

ISBN:

9780135198100

Author:

BOVEE

Publisher:

PEARSON CO

Purchasing and Supply Chain Management

Operations Management

ISBN:

9781285869681

Author:

Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:

Cengage Learning

Production and Operations Analysis, Seventh Editi…

Operations Management

ISBN:

9781478623069

Author:

Steven Nahmias, Tava Lennon Olsen

Publisher:

Waveland Press, Inc.

SEE MORE TEXTBOOKS