MindTap Business Statistics for Ragsdale's Spreadsheet Modeling & Decision Analysis, 8th Edition, [Instant Access], 2 terms (12 months)
8th Edition
ISBN: 9781337274876
Author: Cliff Ragsdale
Publisher: Cengage Learning US
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A manufacturer has a production facility that requires 10,237 units of component JY21 per year.
Following a long-term contract, the manufacturer purchases component JY21 from a supplier with
a lead time of 6 days. The unit purchase cost is $31.4 per unit. The cost to place and process an
order from the supplier is $168 per order. The unit inventory carrying cost per year is 12.2 percent
of the unit purchase cost. The manufacturer operates 250 days a year. Assume EOQ model is
appropriate. If the manufacturer uses a constant order quantity of 1,053 units per order, what is
the annual holding cost?
Use at least 4 decimal places.
(All answers were generated using 1,000 trials and native Excel functionality.) Galaxy Co. sells virtual reality (VR) goggles, particularly targeting customers who like to play video games. Galaxy procures each pair of goggles for $150 from its supplier and sells each pair of goggles for $300. Monthly demand for the VR goggles is a normal random variable with a mean of 160 units and a standard deviation of 40 units. At the beginning of each month, Galaxy orders enough goggles from its supplier to bring the inventory level up to 140 goggles. If the monthly demand is less than 140, Galaxy pays $20 per pair of goggles that remains in inventory at the end of the month. If the monthly demand exceeds 140, Galaxy sells only the 140 pairs of goggles in stock. Galaxy assigns a shortage cost of $40 for each unit of demand that is unsatisfied to represent a loss-of-goodwill among its customers. Management would like to use a simulation model to analyze this situation.
(c) Use the simulation model…
Jankord Jewelers permits the return of their diamond wedding rings, provided the return occurs within two weeks. Typically, 20 percent are returned. If nine rings are sold today, what is the probability that fewer than four will be returned?
A- 0.914
B- 0.962
C- 0.923
D- 0.935
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