17th Edition

ISBN: 9781323590058

Author: Pearson

Publisher: PEARSON C

Concept explainers

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Cost Analysis

The entire idea of cost of production or definition of production cost is applied corresponding or we can say that it is related to investment or money cost. Money cost or investment refers to any money expenditure which the firm or supplier or producer …

Inventory Management

Inventory management is the process or system of handling all the goods that an organization owns. In simpler terms, inventory management deals with how a company orders, stores, and uses its goods.

Project Management

Project Management is all about management and optimum utilization of the resources in the best possible manner to develop the software as per the requirement of the client. Here the Project refers to the development of software to meet the end objective…

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Textbook Question

Chapter 12, Problem 40P

Question

•••• 12.40 A gourmet coffee shop in downtown San Francisco is open 200 days a year and sells an average of 75 pounds of Kona coffee beans a day. (Demand can be assumed to be distributed normally, with a standard deviation of 15 pounds per day.) After ordering (fixed cost = $16 per order), beans are always shipped from Hawaii within exactly 4 days. Per- pound annual holding costs for the beans are $3.

a. What is the economic order quantity (EOQ) for Kona coffee beans?
b. What are the total annual holding costs of stock for Kona coffee beans?
c. What are the total annual ordering costs for Kona coffee beans?
d. Assume that management has specified that no more than a 1% risk during stockout is acceptable. What should the reorder point (ROP) be?
e. What is the safety stock needed to attain a 1 % risk of stockout during lead time?
f. What is the annual holding cost of maintaining the level of safety stock needed to support a 1 % risk?
g. If management specified that a 2% risk of stockout during lead time would be acceptable, would the safety stock holding costs decrease or increase?

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Chapter 12, Problem 39P

Chapter 12, Problem 1.1CS

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Chapter 12 Solutions

OPEARATIONS MANAG.REV CUSTOM 2017

Ch. 12 - Question 1. Describe the four types of inventory.Ch. 12 - Question 2. With the advent of low-cost...Ch. 12 - Question 3. What is the purpose of the ABC...Ch. 12 - Question 4. Identify and explain the types of...Ch. 12 - Question 5. Explain the major assumptions of the...Ch. 12 - Question 6. What is the relationship of the...Ch. 12 - Question 7. Explain why it is not necessary to...Ch. 12 - Question 8. What are the advantages of cycle...Ch. 12 - What impact does a decrease in setup time have on...Ch. 12 - When quantity discounts are offered, why is it not...

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Solution Summary: The author explains that inventory management is the process of ordering, storing and using inventory of the company such raw material, components and finished goods.

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