Operations Management: Sustainability and Supply Chain Management (12th Edition)
12th Edition
ISBN: 9780134130422
Author: Jay Heizer, Barry Render, Chuck Munson
Publisher: PEARSON
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Textbook Question
Chapter 12, Problem 42P
Question
•• 12.28 Based on available information, lead time demand for PC jump drives averages 50 units (
- a. What value of Z should be applied?
- b. How many drives should be carried as safety stock?
- c. What is the appropriate reorder point?
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Question 11
You are responsible for maintaining an appropriate amount of inventory for Component A, using a Q-type
inventory control system (fixed quantity, continuous review). Your company estimates your ordering cost to
be 500 and the annual cost of holding this item in inventory to be 12. Annual demand for this item is
forecasted to be 5,000 and the company has 300 working days per year. Your supplier's lead time is 15
days.
What should your reorder point be if the standard deviation of daily demand is 30 and your target customer
service level is 95%? (Round to the nearest integer.)
Your Answer:
Answer
Question 12
You are responsible for maintaining an appropriate amount of inventory for Component A, using a P-type
inventory control system (periodic review) with P=30. Your supplier's lead time is 20 days. Daily demand
averages 400, with a standard deviation of 200.
How much safety stock will you need if your target customer service level is 95%? (Round to the nearest
integer.)
Your…
Chapter 12 Solutions
Operations Management: Sustainability and Supply Chain Management (12th Edition)
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...
Ch. 12 - What is meant by service level?Ch. 12 - Explain the following: All things being equal, the...Ch. 12 - Describe the difference between a fixed-quantity...Ch. 12 - Explain what is meant by the expression robust...Ch. 12 -
15. What is “safety stock”? What does safety...Ch. 12 - When demand is not constant, the reorder point is...Ch. 12 - How are inventory levels monitored in retail...Ch. 12 - State a major advantage, and a major disadvantage,...Ch. 12 - L. Houts Plastics is a large manufacturer of...Ch. 12 - Boreki Enterprises has the following 10 items in...Ch. 12 - Jean-Marie Bourjollys restaurant has the following...Ch. 12 - Lindsay Electronics, a small manufacturer of...Ch. 12 - William Bevilles computer training school, in...Ch. 12 - • 12.6 If D = 8,000 per month, S = $45 per order,...Ch. 12 - Henry Crouchs law office has traditionally ordered...Ch. 12 - Matthew Liotines Dream Store sells beds and...Ch. 12 - Southeastern Bell stocks a certain switch...Ch. 12 - Lead time for one of your fastest-moving products...Ch. 12 - Annual demand for the notebook binders at Duncans...Ch. 12 - Thomas Kratzer is the purchasing manager for the...Ch. 12 - Joe Henrys machine shop uses 2,500 brackets during...Ch. 12 - Abey Kuruvilla, of Parkside Plumbing, uses 1,200...Ch. 12 - ••• 12.15 M. Cotteleer Electronics supplies...Ch. 12 - •• 12.16 Race One Motors is an Indonesian car...Ch. 12 - Radovilsky Manufacturing Company, in Hayward,...Ch. 12 - Arthur Meiners is the production manager of...Ch. 12 - Cesar Rego Computers, a Mississippi chain of...Ch. 12 - Bell Computers purchases integrated chips at 350...Ch. 12 - Wang Distributors has an annual demand for an...Ch. 12 - Question 12.22 The catering manager of La Vista...Ch. 12 - Prob. 25PCh. 12 - Prob. 26PCh. 12 - Prob. 27PCh. 12 - Question 12.26 Emery Pharmaceutical uses an...Ch. 12 - Prob. 29PCh. 12 - Prob. 30PCh. 12 - Question 12.27 Barbara Flynn is in charge of...Ch. 12 - Question 12.28 Based on available information,...Ch. 12 - Question 12.29 Authentic Thai rattan chairs...Ch. 12 - Question 12.30 Tobacco is shipped from North...Ch. 12 - Prob. 45PCh. 12 - Question 12.32 Chicagos Hard Rock Hotel...Ch. 12 - Question 12.33 First Printing has contracts with...Ch. 12 - Prob. 48PCh. 12 - Question 12.40 A gourmet coffee shop in downtown...Ch. 12 - Question 12.36 Cynthia Knotts oyster bar buys...Ch. 12 - Question 12.37 Henrique Correas bakery prepares...Ch. 12 - Question 12.38 University of Florida football...Ch. 12 - Question Zhou Bicycle Company Zhou Bicycle...Ch. 12 - Question Zhou Bicycle Company Zhou Bicycle...Ch. 12 - Question Zhou Bicycle Company Zhou Bicycle...Ch. 12 - Parker Hi-Fi Systems Parker Hi-Fi Systems, located...Ch. 12 - Parker Hi-Fi Systems Parker Hi-Fi Systems, located...Ch. 12 - Parker Hi-Fi Systems Parker Hi-Fi Systems, located...Ch. 12 - Question Frito-Lay has flourished since its...Ch. 12 - Question Frito-Lay has flourished since its...Ch. 12 - Question Frito-Lay has flourished since its...Ch. 12 - Question Frito-Lay has flourished since its...Ch. 12 - Question Frito-Lay has flourished since its...Ch. 12 - Question Frito-Lay has flourished since its...Ch. 12 - Question Frito-Lay has flourished since its...Ch. 12 - Inventory Control at Wheeled Coach Video Case...Ch. 12 - Prob. 2.2VCCh. 12 - Prob. 2.3VC
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- QUESTION #4 James Marshall, owner and operator of the Hearing Bells Megastore, is reviewing the costs associated with the store's best-selling hearing aid, the HB100. The data available to Mr. Marshall concerning this device follow. 30 units/week Demand Order cost = $5/order Holding cost = $2.50/unit/year %3D The Hearing Bells Megastore operates 52 weeks a year. a. What is the EOQ? b. Given the data from above, and assuming a 300-day work year; how many orders should be processed per year? What is the expected time between orders? c. What is the total cost for the inventory?arrow_forwardQUESTION 15 ID-planned order release using EOQ technique Clancy's Motors has the following demand to meet for custom manufactured fuel injector parts. The holding cost for that item is $2 per month and each setup costs $80. Lead time is 0 months. Calculate the planned order releases using: the EOQ technique including the holding cost of any inventory left over after month 7? Month Requirement 1 400 What is the total cost? 2016 2509 1405 1536 2 150 3 200 150 100 150 250arrow_forwardQuestion2: A company that sells fruit juices sells 1250 cases of fruit juice from cases priced at $50 per case in a month. The business is in city x and juices are ordered from city y. Each order costs the business $250. Storage costs are 20% of a case of fruit juice. According to this;a) the economic order quantity of the enterprise?b) How many days is the time between two orders?c) What is the total inventory cost of the business, including the acquisition costs, in dollars/month?arrow_forward
- Question 20 4 pts A gourmet coffee shop in downtown San Francisco is open 200 days a year and sells an average of 60 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 $15 per order), beans are always delivered from Hawaii in exactly 4 days. Per-pound annual holding %3D costs for the beans are $3. What is the economic order quantity (EOQ) for Kona coffee beans? (round your response to the nearest whole number) 346 24 385 800 12.000arrow_forwardQuestion 8 What of the following best describes just-in-time inventory management? A firm minimises the time lags present in the supply chain by maintaining a certain amount of inventory to use in these lag times Inventory is maintained as a buffer to meet uncertainties in demand, supply, and movements of goods Production inefficiencies arising when production capacity stands idle for lack of materials are minimised by holding a small stock of essentials at all times A firm acquires inventory precisely when needed so that its inventory balance is always at, or close to, zeroarrow_forwardQuestion 3: Powered by Koffee (PBK) is a new campus coffee store. PBK uses 50 bags of whole bean coffee every month, and you may assume that demand is perfectly steady throughout the year. PBK has signed a yearlong contract to purchase its coffee from a local supplier, Phish Roasters, for a price of $25 per bag and an $85 fixed cost for every delivery independent of the order size. The holding cost due to storage is $1 per bag per month. PBK managers figure their cost of capital is approximately 2 percent per month. What is the optimal order size, in bags? (Round the answer to 2 decimal places.) Given your answer in (a), how many times a year does PBK place orders? (Round the answer to the nearest whole number.) Given your answer in (a), how many months of supply of coffee does PBK have on average? (Round the answer to 2 decimal places.) On average, how many dollars per month does PBK spend to hold coffee (including cost of capital)? (Round the answer to 2 decimal places.) Suppose…arrow_forward
- Question 3 Which of the following Inventory Holding Costs refers to the cost associated with return on the investment in inventory? Service Capital Cost Space Riskarrow_forwardQuestion 23 A truck maintenance facility has annual demand of 25000 gallons of motor oil and operates 360 days per year. The lead time from placement of an order for motor oil until delivery is 5 days and the standard deviation of daily usage is 12.5 gallons. Use z=1.28 for a 90% service level and determine the appropriate re-order point. O 347.22 gallons 35.77 gallons 383 gallons 370 gallonsarrow_forwardquestion #2 Same problem statement: Weekly demand for DVD-Rs at a retailer is normally distributed with a mean of 1,000 boxes and a standard deviation of 150. Currently, the store places orders to the supplier, with a reorder point of 4,200 boxes. The order quantity to the supplier is fixed at 5,000 boxes. Replenishment lead time is 4 weeks, fixed order cost per order is $100, each box costs the retailer $10, and the inventory holding cost is 25% per year. If the retailer wants to achieve a 99% service level (use the z-value with one decimal, as in Table 13.4 on page 400 of the textbook), what should be the safety stock value? Numeric Response 772.8 SHARE f5 f6 4- f7 ♫+ fg fil W f12. insert prt sc delete home @ 0 end 1:23 PM 11/15/2022 pg Larrow_forward
- Question 6 (ABC Analysis) Use the information provided below and classifies the inventory items according to the ABC classification. Item: Annual demand: Unit Price N$: 1 1000 0.50 2 100 250 3 50 1000 4 50 800 5 300 50 6 500 10 7 500 7arrow_forwardCan you assist me with Question 12.42. Please right out the steps it's easier to understand verses on the excel spreadsheet. If you do it in excel can you make it easy to follow along to. Thank you kindly.arrow_forwardI) annual usage - 1151 pcs Placement cost - 91 Rupees Storage cost - 8 Rupees Compute the reorder quantity/ EOQ ?arrow_forward
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