OPERATIONS MANAGEMENT CONNECT AC
14th Edition
ISBN: 9781264592784
Author: Stevenson
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 12, Problem 11DRQ
What is meant by the term service level? Generally speaking, how is service level related to the amount of safety stock held?
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
A pharmacist is trying to determine the inventory order and stock levels for a particular drug. The following information is available about the drug.
Demand (D)
85 tablets/week
Working weeks per year
52 weeks
Unit holding cost per year (H)
$6
Order cost (S)
$44/order
Standard deviation of weekly demand (sd)
15 tablets
Lead time (L)
2 weeks
Desired cycle service level
95%
If the pharmacist uses the continuous review (Q) system to control the inventory of the drug, what would be the order quantity and reorder point?
If the pharmacist uses the periodic review (P) system to control the inventory of the drug, what would be the review interval and target inventory level? (Hint: Use the EOQ model to derive the review interval P)
explain the Kraljic supply Matrix of McDonald's with a diagram
define the ABC approach to inventory management Several metrics can be used to identify an A-status:explain?
Chapter 12 Solutions
OPERATIONS MANAGEMENT CONNECT AC
Ch. 12.3 - Prob. 1RQCh. 12 - What are the primary reasons for holding...Ch. 12 - What are the requirements for effective inventory...Ch. 12 - Briefly describe each of the costs associated with...Ch. 12 - What potential benefits and risks do RFID tags...Ch. 12 - Prob. 5DRQCh. 12 - Prob. 6DRQCh. 12 - a. List the major assumptions of the EOQ model. b....Ch. 12 - Explain briefly how a higher carrying cost can...Ch. 12 - What is safety stock, and what is its purpose?
Ch. 12 - Prob. 10DRQCh. 12 - What is meant by the term service level? Generally...Ch. 12 - Describe briefly the A-B-C approach to inventory...Ch. 12 - The purchasing agent for a company that assembles...Ch. 12 - Explain how a decrease in setup time can lead to a...Ch. 12 - What is the single-period model, and under what...Ch. 12 - Can the optimal stocking level in the...Ch. 12 - Prob. 17DRQCh. 12 - What trade-offs are involved in each of these...Ch. 12 - Who needs to be involved in inventory decisions...Ch. 12 - How has technology aided inventory management? How...Ch. 12 - To be competitive, many fast-food chains began to...Ch. 12 - As a supermarket manager, how would you go about...Ch. 12 - Sam is at the post office to mail a package. After...Ch. 12 - Give two examples of unethical conduct involving...Ch. 12 - Prob. 1PCh. 12 - a. The following table contains figures on the...Ch. 12 - A bakery buys flours in 25-pound bags. The bakery...Ch. 12 - A large law firm uses an average of 40 boxes of...Ch. 12 - Garden Variety Flower Shop uses 750 clay pots a...Ch. 12 - A produce distributor uses 800 packing crates a...Ch. 12 - A manager receives a forecast for next year....Ch. 12 - A food processor uses approximately 27,000 glass...Ch. 12 - The Friendly Sausage Factory (FSF) can produce hot...Ch. 12 - A chemical firm produces sodium bisulfate in...Ch. 12 - A company is about to begin production of a new...Ch. 12 - Prob. 12PCh. 12 - A mail-order house uses 18,000 boxes a year....Ch. 12 - A jewelry firm buys semiprecious stones to make...Ch. 12 - A manufacturer of exercise equipment purchases the...Ch. 12 - A company will begin stocking remote control...Ch. 12 - A manager just received a new price list from a...Ch. 12 - A newspaper publisher uses roughly 800 feet of...Ch. 12 - Given this information: Expected demand during...Ch. 12 - Given this information: Lead-time demand = 600...Ch. 12 - Demand for walnut fudge ice cream at the Sweet...Ch. 12 - The injection molding department of a company uses...Ch. 12 - A company uses 85 circuit boards a day in a...Ch. 12 - One item a computer store sells is supplied by a...Ch. 12 - The manager of a car wash received a revised price...Ch. 12 - A small copy center uses five 500-sheet boxes of...Ch. 12 - Ned's Natural Foods sells unshelled peanuts by the...Ch. 12 - Regional Supermarket is open 360 days per year....Ch. 12 - A service station uses 1,200 cases of oil a year....Ch. 12 - Caring Hospital's dispensary reorders doses of a...Ch. 12 - A drugstore uses fixed-order cycles for many of...Ch. 12 - Prob. 32PCh. 12 - Prob. 33PCh. 12 - Demand for jelly doughnuts on Saturdays at Don's...Ch. 12 - A public utility intends to buy a turbine as part...Ch. 12 - Skinner's Fish Market buys fresh Boston bluefish...Ch. 12 - A small grocery store sells fresh produce, which...Ch. 12 - Demand for devil's food whipped-cream layer cake...Ch. 12 - Prob. 39PCh. 12 - Demand for rug-cleaning machines at Clyde's...Ch. 12 - A manager is going to purchase new processing...Ch. 12 - A Las Vegas supermarket bakery must decide how...Ch. 12 - Offwego Airlines has a daily flight from Chicago...Ch. 12 - UPD Manufacturing produces a range of health care...Ch. 12 - Prob. 1.2CQCh. 12 - Prob. 2.1CQCh. 12 - SARAH LUBBERS AND CHRIS RUSCHE, GRAND VALLEY STATE...Ch. 12 - SARAH LUBBERS AND CHRIS RUSCHE, GRAND VALLEY STATE...Ch. 12 - Prob. 3.3CQCh. 12 - SARAH LUBBERS AND CHRIS RUSCHE, GRAND VALLEY STATE...Ch. 12 - Prob. 3.5CQCh. 12 - Prob. 1OTQCh. 12 - Prob. 2OTQCh. 12 - Prob. 3OTQCh. 12 - Prob. 4OTQ
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, operations-management and related others by exploring similar questions and additional content below.Similar questions
- Maxantene Products buys 300,000 units of a crucial input per year from a supplier that fulfills its orders within two days after receiving them. Maxantene Product submits its orders directly to the supplier through a Web interface, so its lead time is the supplier two day turnaround time. Each order cost Maxantene Products about P500 to place, while carrying cost are about P60 per unit per year. The company seek to maintain a five day usage level in a safety stock. Assume a 365 day year. ------------- a.What is Maxantene Products economic order quantity for this input? b. What is Maxantene Products' carrying cost at the EOQ? * c. At what inventory level of this input should Maxantene re-order?arrow_forwardExplain how are service level and inventory level dependent on each other ?arrow_forwardWhat is the cycle service level for a company that has a re-order point of 400, an average weekly demand of 100, a weekly demand standard deviation of 20, and a lead time of 5 weeks?arrow_forward
- what are the endogeneous and expgeneous variable for total inventory in semiconductor industryarrow_forwardUse the following data of Starfish, Inc. Unit Total Units Units Cost Cost Sold Beginning inventory 14 $ 7 $ 98 Purchase on Apr 25 43 8 344 Purchase on Nov 13 14 9 126 Sales 50 ? ? Starfish's average cost of ending inventory isarrow_forwardEarthbound Corporation is a manufacturer and distributor of air conditioning systems. You have been engaged to install an accounting system for Earthbound period among the inventory control features earthbound desires as part of the system are indicators of how much to order and when period. The following information is furnished for a product called “Hydronix” which is carried in inventory: Hydronix are sold by the gross (12 dozen) at a list price of P800 per gross FOB shipper. John receives a 40% trade discount off list price on purchases in gross lots. Freight cost is P20 gross from the shipping point to John's plant John uses about 5,000 Hydronix during 259-day production year and must purchase a total of 36 gross per year to allow for normal breakage. Minimum and maximum usages are 12 and 28, respectively. It takes 20 working days (normal delivery time) to receive an order from the date the purchase request is initiated. A rush order in full gross lots can be received by air…arrow_forward
- What would be the relationship (one-to-one, one-to-many, or many-to-many) relationship between: Sales and inventory Inventory and Order form Order and Vendorarrow_forwardPlease help mearrow_forwardA spice retailer has a lead time of 4 weeks from its supplier of a particular item and the retailer orders every week. Average weekly demand is normally distributed with a mean of 40 units and standard deviation of 30 units. a) If it uses an order-up-to level of 301 units, what is its expected ON-HAND inventory? b) If it uses an order-up-to level of 250 units, what is its expected ON-ORDER inventory? c) If it uses an order-up-to-level of 368 units, what is its in-stock probability? d) For a .96 in-stock probability, what should its order=up-to level be?arrow_forward
- A firm cost of good sold averages P2,000,000 per month, and it keeps an inventory equal to 50% of its monthly cost of good sold on hand at all times. Using a 365 -day year, what is its inventory conversion period? Standford Packing had sales of P3.2 million and a gross profit margin of 35% last year. If Standford inventory averaged P0.4 million last year, What was the length of the average age of inventory?arrow_forwardABC Corporation is a large manufacturing company that has been using an outdated inventory management system for the past 10 years. The system has become slow and unreliable, causing delays in production and shipping. The IT department has recommended replacing the system with a modern cloud-based solution that can be accessed from anywhere and has the potential to integrate with other business systems.After a thorough evaluation of several vendors and their products, the IT team has recommended the purchase of a system called "InventoryPro". The system has a user-friendly interface, robust reporting capabilities, and is scalable to accommodate future growth.The CEO has approved the project, and the IT team has started working on the implementation plan. The project team includes a project manager, business analyst, database administrator, software developer, and testing specialist.As part of the project plan, the team will need to migrate the data from the old system to the new one,…arrow_forwardWhole Nature Foods sells a gluten-free product for which theannual demand is 5,000 boxes. At the moment, it is paying $6.40 for each box; carrying cost is 25% of the unit cost; order-ing costs are $25. A new supplier has offered to sell the same item for $6.00 if Whole Nature Foods buys at least 3,000 boxesper order. Should the firm stick with the old supplier, or takeadvantage of the new quantity discount?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Practical Management ScienceOperations ManagementISBN:9781337406659Author:WINSTON, Wayne L.Publisher:Cengage,
Operations ManagementOperations ManagementISBN:9781259667473Author:William J StevensonPublisher:McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi...Operations ManagementISBN:9781259666100Author:F. Robert Jacobs, Richard B ChasePublisher:McGraw-Hill Education
Purchasing and Supply Chain ManagementOperations ManagementISBN:9781285869681Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. PattersonPublisher:Cengage Learning
Production and Operations Analysis, Seventh Editi...Operations ManagementISBN:9781478623069Author:Steven Nahmias, Tava Lennon OlsenPublisher:Waveland Press, Inc.
Practical Management Science
Operations Management
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:Cengage,
Operations Management
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
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.
Inventory Management | Concepts, Examples and Solved Problems; Author: Dr. Bharatendra Rai;https://www.youtube.com/watch?v=2n9NLZTIlz8;License: Standard YouTube License, CC-BY