OPER.MGMT W/CONNECT
14th Edition
ISBN: 9781264412341
Author: Stevenson
Publisher: MCG
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Chapter 12, Problem 35P
A public utility intends to buy a turbine as part of an expansion plan and must now decide on the number of spare parts to order. One part, no. X135, can be purchased for $ 100 each. Carrying and disposal costs are estimated to be 145 percent of the purchase price over the life of the turbine. A stockout would cost roughly $88,000 due to downtime, ordering, and "special purchase" factors. Historical records based on the performance of similar equipment operating under similar conditions suggest that demand for spare parts will tend to approxin1ate a Poisson distribution with a mean of 3.2 parts for the useful life of the turbine.
a. What is the optimal number of spares to order?
b. Carrying no spare parts would be the best strategy for what range of shortage cost?
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Chapter 12 Solutions
OPER.MGMT W/CONNECT
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?
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