You are a newsvendor selling the San Pedro Times every morning. Before you get to work, you go to the printer and buy the day'spaper for $0.25 a copy. You sell a copy of the San Pedro Times for $1.30. Daily demand is distributed normally with mean = 260 andstandard deviation = 46. At the end of each morning, any leftover copies are worthless and they go to a recycle bin.a. How many copies of the San Pedro Times should you buy each morning?Note: Use Excel's NORM.S.INV() function to find the z value. Round your z value and service level to 2 decimal places and finalanswer to the nearest whole number.Optimal order quantityb. Based on a, what is the probability that you will run out of stock?Note: Round your answer to the nearest whole percent.Probability%

Include this explanation to make the answer clearer: a. Optimal order quantityThe best order…

Answered: You are a newsvendor selling the San…

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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Caring Hospital's dispensary reorders doses of a drug when the supply on hand falls to 18 units. Lead time for resupply is three days. Given the typical usage over the last 10 days, what service level is achieved with the hospital's reorder policy? (Hint. Use the following formula.) (Do not round intermediate calculations. Round your "z" value and final answer to 2 decimal places.) Use Table. ROP =dLT +2 (od) √LT Day Units 1 3 2 3 4 4 7 5 Service level Click here for the Excel Data File 5 5 % 6 6 7 4 8 3 9 4 10 5
Give typed full explanation
A. Determine the order quantity. B. Determine the reorder point.
The total stockout cost = $ enter your response here. (Enter your response as a whole number.)
ABC classification divides on-hand inventory into three classes, generally based upon a. item quantity. b. unit price. c. the number of units on hand. d. annual demand. e. annual dollar value.
19. At which point, the storekeeper should initiate the purchase requisition for fresh supplies of the material? a. Reorder level b. Maximum level c. Minimum level d. Danger level
Southern Markets, Inc. is considering the use of ABCanalysis to focus on the most critical SKUs in its inventory.Currently, there are approximately 20,000 different SKUswith a total dollar usage of $10,000,000 per year.a. What would you expect to be the number of SKUs and thetotal annual dollar usage for A items, B items, and C itemsat Southern Markets, Inc.? b. The following table provides a random sample of the unitvalues and annual demands of eight SKUs. Categorizethese SKUs as A, B, and C items.
A retailer stocks baseball caps for three different teams. Information for each can be found in the table below. How much potential sales revenue are they losing each week due to stockouts? 864 1158 1366 1540
Fisk Corporation is trying to improve its inventory control system and has installed an online system at its retail stores. Fisk anticipates sales of 58,800 units per year, an ordering cost of $4 per order, and carrying costs of $1.50 per unit. In the second year, Fisk Corporation finds that it can reduce ordering costs to $1 per order, but carrying costs will stay the same at $1.50 per unit. a-1. What is the economic ordering quantity for the second year? Economic ordering quantity (EOQ) a-2. How many orders will be placed during the second year? Number of orders a-3. What will the average inventory be for the second year? Average inventory Total costs units units a-4. What is the total cost of ordering and carrying inventory for second year? LA
A manufacturer of hospital supplies has a uniform annual demand for 80,000 boxes of bandages. It costs $20 to store one box of bandages for one year and $320 to set up the plant for production. How many times a year should the company produce boxes of bandages in order to minimize the total storage and setup costs? Question content area bottom Part 1 The company should produce boxes of bandages enter your response here time(s) a year.
At a recent manufacturing workshop, XYZ, Incorporated explained that demand for disposable masks increase rapidly in March 2020 when quarantine mandates first took effect. At the time, retailers could only place a single order to cover demands through the end of the summer. A certain retailer purchased disposal masks from a supplier at a cost of $20 per unit and sold them for $30 per unit. By the end of summer, demand for masks subsided considerably and all masks that weren't sold during the summer could be sold at a discounted price of $18 per unit. The retailer estimated that demand between March and August would be Normally distributed with mu = 10,000 and sigma = 1525 units With, supply chains becoming more stable since March 2020, the retailer is currently in the process of establishing a contract with a disposable mask supplier. The supplier has agreed to sell masks to the retailer for $18 per unit and will make deliveries any time the supplier places an order for a cost of $100…
Paul’s Toy Distributor (PTD) sells 200 game consoles every week. PTD charges a $300 fixed cost for every delivery. PTD’s annual inventory holding cost is $45 per console. Assume that there are 52 weeks a year. Assume that PTD orders 1000 game consoles at a time. What is the average amount of time the consoles stay as PTD’s inventory before being sold? Find the closest answer.

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