17th Edition

ISBN: 9781259142208

Author: CACHON, Gérard, Terwiesch, Christian

Publisher: Mcgraw-hill Education,

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Textbook Question

Chapter 13, Problem 7CQ

A retailer has two merchandizers, Sue and Bob, who are responsible for setting order quantities for the products they manage. For all of their products, the critical ratio is .7 and the coefficient of variation of their demand forecasts is 0.35. At the end of the season, Sue is proud to report that she has sold the entire inventory she purchased. Bob, on the other hand, sold only about a third of his products. Who is more likely to be choosing quantities that maximize expected profit?

a. Sue because she doesn’t incur the cost of salvaging inventory.
b. Sue because she must have sold more units than Bob.
c. Bob because even leftover inventory generates some additional revenue.
d. Bob because he is probably ordering more than the mean of the demand forecast.

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Chapter 13, Problem 6CQ

Chapter 13, Problem 8CQ

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Sam's Pet Hotel operates 51 weeks per year, 6 days per week, and uses a continuous review inventory system. It purchases kitty litter for $13.00 per bag. The following information is available about these bags: > Demand 70 bags/week > Order cost $58.00/order > Annual holding cost 30 percent of cost > Desired cycle-service level = 80 percent >Lead time 4 weeks (24 working days) > Standard deviation of weekly demand = 15 bags > Current on-hand inventory is 320 bags, with no open orders or backorders. a. Suppose that the weekly demand forecast of 70 bags is incorrect and actual demand averages only 45 bags per week. How much higher will total costs be, owing to the distorted EOQ caused by this forecast error? The costs will be $ higher owing to the error in EOQ. (Enter your response rounded to two decimal places.)

a. The average aggregate inventory value of the product if Ruby-Star used vendor 1 exclusively is $enter your response here. (Enter your response as a whole number.) b. The aggregate inventory value of the product if Ruby-Star used vendor 2 exclusively is shown below. c. How would your analysis change if average weekly demand increased to 160 units per week? The aggregate inventory values are shown below.

a. What order quantity should be used? lures. (Enter your response rounded to the nearest whole number.) b. What reorder point should be used? (Enter your response rounded to the nearest whole number.) c. What is the total annual cost for this inventory system? (Enter your response rounded to two decimal places)

Chapter 13 Solutions

Operations Management

Ch. 13 - Which of the following is NOT true about the...Ch. 13 - A newsvendor orders the quantity that maximizes...Ch. 13 - Prob. 3CQ Ch. 13 - Suppose the newsvendor model describes a firms...Ch. 13 - Prob. 5CQ Ch. 13 - Prob. 6CQ Ch. 13 - A retailer has two merchandizers, Sue and Bob, who...Ch. 13 - Prob. 8CQ Ch. 13 - Which of the following changes in the in-stock...Ch. 13 - Prob. 10CQ

Ch. 13 - Prob. 11CQ Ch. 13 - Prob. 12CQ Ch. 13 - Prob. 13CQ Ch. 13 - Prob. 14CQ Ch. 13 - Dan McClure owns a thriving independent bookstore...Ch. 13 - Flextrola, Inc., an electronics systems...Ch. 13 - Monsanto sells genetically modified seed to...Ch. 13 - Fashionables is a franchisee of The UnLimited, the...Ch. 13 - Teddy Bower is an outdoor clothing and accessories...Ch. 13 - Prob. 6PA Ch. 13 - Goop Inc. needs to order a raw material to make a...Ch. 13 - Geoff Gullo owns a small firm that manufactures...Ch. 13 - Prob. 9PA Ch. 13 - Prob. 10PA Ch. 13 - Prob. 11PA

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