Operations Management: Processes And Supply Chains (12th Edition) (what's New In Operations Management)
12th Edition
ISBN: 9780134742205
Author: Lee J. Krajewski, Manoj K. Malhotra, Larry P. Ritzman
Publisher: PEARSON
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Chapter 6, Problem 10P
Summary Introduction
Interpretation: The stock level that can be authorized for the enterprise is to be computed.
Concept Introduction: Stock levels are pre-determined to avoid overstocking of materials and at the same time to minimize the chances of meeting lower stock levels.
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DETERMINING THE NUMBER OF KANBAN CONTAINERS
Hobbs Bakery produces short runs of cakes that are shipped to grocery stores. The owner, Ken Hobbs,wants to try to reduce inventory by changing to a kanban system. He has developed the following dataand asked you to finish the project.Production lead time = Wait time + Material handling time + Processing time = 2 daysDaily demand = 500 cakesSafety stock = 12 dayContainer size (determined on a production order size EOQ basis) = 250 cakes
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Jitsmart is a retailer of plastic action-figure toys. The action figures are purchased from Tacky Toys, Inc., and arrive in boxes of 20. Full boxes are stored on high shelves out of reach of customers. A small inventory is maintained on child-level shelves. Depletion of the lower-shelf inventory signals the need to take down a box
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Chapter 6 Solutions
Operations Management: Processes And Supply Chains (12th Edition) (what's New In Operations Management)
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- A company begins a review of ordering policies for its continuous review system by checking the current policies for a sample of SKUS Following are the characteristics of one tem Demand (D)=85 units/week (Assume 52 weeks per year) Ordening and setup cost (S) $75/order Holding cost (H)-$16/und/year Lead time (L) 5 week(s) Standard deviation of weekly demand 22 units Cycle-service lovel-90 percent >EOQ-207 units Using the above information, develop the best policies for a periodic review system Refer to the standard normal table for z-values a. What value of P gives the same approximate number of orders per year as the EOQ? weeks (Enter your response rounded to the nearest whole number) b. To provide a 98 percent cycle-service level, the average safety stock is To provide a 98 percent cycle-service level, the target inventory level is unts (Enter your response rounded to the nearest whole number) units (Enter your response rounded to the nearest whole number)arrow_forwardThe Northridge Company tends to keep the inventory low. At the same time, it is important to respond to demand quickly, since a customer who wants a product K is very likely to get one from a competitor if Northridge Company doesn’t have one available immediately. Northridge Company’s current policy to produce the product K is to produce 100 per week, which is the average demand. Even this is a problem, as the production manager has pointed out, since the equipment is also used for other products and the lot size of 300 would be much more efficient. He said he is currently set up the production for product K for the next week and states that he has capacity available to produce 300 at a time next week. The following lists the forecasts and actual customer orders for the next 12 weeks. Week 1 2 3 4 5 6 7 8 9 10 11 12 Forecast 90 120 110 80 85 95 100 110 90 90 100 110 Customer Orders 105 97 93 72 98 72 53 21…arrow_forwardWhat is the average inventory? What is the average flow time? What is the required safety inventory to achieve the desired service level? What is the required re-order point to achieve the desired service level?arrow_forward
- Is proper cost of storage is necessary? 1-True 2-Falsearrow_forwardOnce issued, the purchase order becomes the basis for managing the purchasing relationship on an ongoing basis True Falsearrow_forwardThe production schedule at Mazda calls for 1,500 Mazdas to be produced during each of 22 production days in January and 1,050 Mazdas to be produced during each of 20 production days in February. Mazda uses a kanban system to communicate with Gesundheit, a nearby supplier of tires. Mazda purchases four tires per vehicle from the Gesundheit. The safety stock policy variable, a, is 0.14. The container (a delivery truck) size is 225 tires. The average waiting time plus material handling time is 0.15 day per container. Assembly lines are rebalanced at the beginning of each month. The average processing per container in January is 0.20 day. February processing time will average 0.30 day per container. How many containers should be authorized for January? How many containers should be authorized for February? containers. (Enter your response rounded up to the next whole number.) containers. (Enter your response rounded up to the next whole number.)arrow_forward
- Reduction in inventories can results in a significant increase in return on investment (ROI) O a. True O b. Falsearrow_forwardThe production schedule at Mazda calls for 1,250 Mazdas to be produced during each of 22 production days in January and 1,050 Mazdas to be produced during each of 20 production days in February. Mazda uses a kanban system to communicate with Gesundheit, a nearby supplier of tires. Mazda purchases four tires per vehicle from the Gesundheit. The safety stock policy variable, a, is 0.08. The container (a delivery truck) size is 250 tires. The average waiting time plus material handling time is 0.50 day per container. Assembly lines are rebalanced at the beginning of each month. The average processing per container in January is 0.50 day. February processing time will average 0.10 day per container. How many containers should be authorized for January? containers. (Enter your response rounded up to the next whole number.)arrow_forwardThe daily demand for printer paper at the School of Business is approximately normal with a mean of 15.2 boxes and a standard deviation of 1.6 per day. The Administrative Assistant reviews the inventory every 30 days, and the lead time is 5 days. The division set a policy of satisfying 96% of the demand for paper. If there are 125 boxes of printer paper in inventory at the beginning of this review period, how many boxes of printer paper should be ordered? What is the variance of demand during the review period plus the lead-time period? What is the standard deviation of demand during the review period plus the lead-time period? A. Variance = 76.80 Standard deviation = 8.76 B. Variance = 89.60 Standard deviation = 9.47 C. Variance = 9.47 Standard deviation = 89.60 D. Variance = 12.8 Standard deviation = 3.58arrow_forward
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