Operations Management: Processes and Supply Chains (12th Edition) (What's New in Operations Management)
12th Edition
ISBN: 9780134741062
Author: Lee J. Krajewski, Manoj K. Malhotra, Larry P. Ritzman
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 9, Problem 18P
In a two-bin inventory system, the demand for 3-inch lag bolts during the 2-week lead time is
- What is the probability of demand exceeding the reorder point when the normal level in the second bin is set at 130 units?
- What is the probability of demand exceeding the 130 units in the second bin if it takes 3 weeks to receive a replenishment order?
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
In a two-bin inventory system, the demand for three-inch lag bolts during the 2-week lead time is normally distributed, with an average of 53 units per week. The standard deviation of weekly demand is 5 units. a. What is the probability of demand exceeding the reorder point when the normal level in the second bin is set at 130 units? b. What is the probability of demand exceeding the 130 units in the second bin if it takes 3 weeks to receive a replenishment order?
Xemex has collected the following inventory data for the six items that it stocks:
ITEM CODE
UNIT COST ($)
ANNUAL DEMAND (UNITS)
ORDERING COST ($)
CARRYING COST AS A PERCENTAGE OF UNIT COST
1
10.60
600
40
20
2
11.00
450
30
25
3
2.25
500
50
15
4
150.00
560
40
15
5
4.00
540
35
16
6
4.10
490
40
17
Lynn Robinson, Xemex’s inventory manager, does not feel that all of the items can be controlled. What ordered quantities do you recommend for which inventory product(s)?
The amount of denim used daily by the Southwest ApparelCompany in its manufacturing process to make jeans isnormally distributed with an average of 4000 yards ofdenim and a standard deviation of 600 yards. The lead timerequired to receive an order of denim from the textile mill
is a constant 7 days. Determine the safety stock and re-order point if the company wants to limit the probability of
a stockout and work stoppage to 5%.
Chapter 9 Solutions
Operations Management: Processes and Supply Chains (12th Edition) (What's New in Operations Management)
Ch. 9 - What is the relationship between inventory and the...Ch. 9 - Suppose that a large discount retailer with a lot...Ch. 9 - Will organizations ever get to the point where...Ch. 9 - A part is produced in lots of 1,000 units. It is...Ch. 9 - Prince Electronics, a manufacturer of consumer...Ch. 9 - Terminator, Inc. manufactures a motorcycle part in...Ch. 9 - Ruby-Star Incorporated is considering two...Ch. 9 - Haley Photocopying purchases paper from an...Ch. 9 - Prob. 6PCh. 9 - Southern Markets, Inc. is considering the use of...
Ch. 9 - New Wave Shelving’s inventory manager would like...Ch. 9 - Yellow Press, Inc. buys paper in 1,500-pound rolls...Ch. 9 - Babble, Inc. buys 400 blank cassette tapes per...Ch. 9 - At Dot Com, a large retailer of popular books,...Ch. 9 - Leaky Pipe, a local retailer of plumbing supplies,...Ch. 9 - Sam’s Cat Hotel operates 52 weeks per year, 6...Ch. 9 - Consider again the kitty litter ordering policy...Ch. 9 - In a Q system, the demand rate for strawberry ice...Ch. 9 - Petromax Enterprises uses a continuous review...Ch. 9 - In a continuous review inventory system, the lead...Ch. 9 - In a two-bin inventory system, the demand for...Ch. 9 - You are in charge of inventory control of a highly...Ch. 9 - Your firm uses a continuous review system and...Ch. 9 - A company begins a review of ordering policies for...Ch. 9 - Prob. 22PCh. 9 - The Farmer’s Wife is a country store...Ch. 9 - Prob. 24PCh. 9 - Prob. 25PCh. 9 - Prob. 26PCh. 9 - In a P system, the lead time for a box of...Ch. 9 - Suppose that Sam’s Cat Hotel in Problem 13 uses...Ch. 9 - Your firm uses a periodic review system for all...Ch. 9 - Using the same information as in Problem 21,...Ch. 9 - Wood County Hospital consumes 1,000 boxes of...Ch. 9 - A golf specialty wholesaler operates 50 weeks per...Ch. 9 - What is the EOQ and what is the lowest total cost?Ch. 9 - What is the annual cost of holding inventory at...Ch. 9 - Prob. 3AMECh. 9 - Prob. 4AMECh. 9 - Prob. 5AMECh. 9 - Prob. 6AMECh. 9 - Comment on the sensitivity of the EOQ model to...Ch. 9 - Consider the pressures for small versus large...Ch. 9 - Prob. 2VCCh. 9 - The Marker Maker© product recently experienced an...Ch. 9 - Put yourself in Sue McCaskey’s position and...Ch. 9 - By how much do your recommendations for these two...
Additional Business Textbook Solutions
Find more solutions based on key concepts
There is a huge demand in the United States and elsewhere for affordable women’s clothing. Low-cost clothing re...
Operations Management
What is precedent, and how does it affect common law?
Business in Action (8th Edition)
Feeding America Each year, the Feeding America network helps provide food to more than 46 million people facing...
Operations and Supply Chain Management 9th edition
2. In what circumstances might a market-pull approach or a technology-push approach to new-product design be th...
OPERATIONS MANAGEMENT IN THE SUPPLY CHAIN: DECISIONS & CASES (Mcgraw-hill Series Operations and Decision Sciences)
The flowchart for the process at the local car wash. Introduction: Flowchart: A flowchart is a visualrepresenta...
Principles Of Operations Management
There is a huge demand in the United States and elsewhere for affordable women’s clothing. Low-cost clothing re...
Loose-leaf for Operations Management (The Mcgraw-hill Series in Operations and Decision Sciences)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, operations-management and related others by exploring similar questions and additional content below.Similar questions
- Wang Distributors has an annual demand for an airport metal detector of 1,421 units. The regular cost of a detector for Wang is $363. The storage cost is estimated to be 20% of the unit cost, and the cost of placing each order is $25. If Mr. Wang, the owner, orders quantities of 300 or more, the cost of one detector will be $365. Wang Distributors has a year of 250 business days. When a new order of detectors is made, the supplier takes 3 days to deliver it. Show your work. 1. What inventory management model should we use to solve this problem? Model Economic Quantity to Produce Model Economic Quantity to Order Model to handle dependent demand Model for discount purchases 2. What is the optimal quantity of detectors that should be made in each order if purchased at full price? Response 3. What is the optimal quantity of detectors that should be made in each order if purchased at a discount price? Response 4. After validating the quantity of detectors that should be made in each order…arrow_forwardFor many firms, inventory usage is not uniformthroughout the year but instead follows some seasonal pattern. Can the EOQ model be used in thissituation? If so, how?arrow_forwardSAFETY STOCK WITH PROBABILISTIC DEMAND Memphis Regional Hospital stocks a “code blue” resuscitation kit that has a normally distributeddemand during the reorder period. The mean (average) demand during the reorder period is 350 kits,and the standard deviation is 10 kits. The hospital administrator wants to follow a policy that results instockouts only 5% of the time.(a) What is the appropriate value of Z ? (b) How much safety stock should the hospital maintain?(c) What reorder point should be used?APPROACH c The hospital determines how much inventory is needed to meet the demand 95% of thetime. The figure in this example may help you visualize the approach. The data are as follows:m = Mean demand = 350 kitssdLT = Standard deviation of demand during lead time = 10 kitsZ = Number of standard normal deviationsarrow_forward
- H & K Electronic Warehouse sells a 12-pack of AAA batteries, and this is a very popular item. Demand for this is normally distributed, with an average of 50 packs per day and a standard deviation of 16. The average delivery time is 5 days, with a standard deviation of 2 days. Delivery time has been found to be normally distributed. A 96% service level is desired. What is the standard deviation of demand during the lead time? How much safety stock should be carried, and what should be the reorder pointarrow_forwardPeter Sagan is in charge of maintaining hospital supplies at Champs Hospital. During the past year the mean weekly demand for a special type of tubing was 186 packages of this tubing with a standard deviation of 13 packages of tubing. The lead time for receiving this tubing from the supplier is 1.5 weeks. Peter would like to maintain a 95% service level and places an order for 750 packages every time an order is placed. d) If the weekly demand is 186 and there is a 1.5 week lead time - what is the reorder point (99% service level)? e) If the carrying cost per year is $0.50/unit/year - what is the additional cost associate with the 99% service level compared to 95% service level (i.e. cost of safety stock at 99% level - cost of safety stock at 95% service level)? solve on excelarrow_forwardPeter Sagan is in charge of maintaining hospital supplies at Champs Hospital. During the past year the mean weekly demand for a special type of tubing was 186 packages of this tubing with a standard deviation of 13 packages of tubing. The lead time for receiving this tubing from the supplier is 1.5 weeks. Peter would like to maintain a 95% service level and places an order for 750 packages every time an order is placed. d) If the weekly demand is 186 and there is a 1.5 week lead time - what is the reorder point (99% service level)? e) If the carrying cost per year is $0.50/unit/year - what is the additional cost associate with the 99% service level compared to 95% service level (i.e. cost of safety stock at 99% level - cost of safety stock at 95% service level)?arrow_forward
- Dunstreet’s Department Store would like to develop an inventory ordering policy of a 95 percent probability of not stocking out. To illustrate your recommended procedure, use as an example the ordering policy for white percale sheets. Demand for white percale sheets is 5,000 per year. The store is open 365 days per year. Every two weeks (14 days) inventory is counted and a new order is placed. It takes 10 days for the sheets to be delivered. Standard deviation of demand for the sheets is five per day. There are currently 150 sheets on hand. How many sheets should you order?arrow_forwardDunstreet's Department Store would like to develop an inventory ordering policy of a 90 percent probability of not stocking out. To illustrate your recommended procedure, use as an example the ordering policy for white percale sheets.Demand for white percale sheets is 3,400 per year. The store is open 365 days per year. Every two weeks (14 days) inventory is counted and a new order is placed. It takes 12 days for the sheets to be delivered. Standard deviation of demand for the sheets is five per day. There are currently 170 sheets on hand. How many sheets should you order?arrow_forwardSouthern Markets, Inc. is considering the use of ABCanalysis to focus on the most critical SKUs in its inventory.Currently, there are approximately 20,000 different SKUswith a total dollar usage of $10,000,000 per year.a. What would you expect to be the number of SKUs and thetotal annual dollar usage for A items, B items, and C itemsat Southern Markets, Inc.? b. The following table provides a random sample of the unitvalues and annual demands of eight SKUs. Categorizethese SKUs as A, B, and C items.arrow_forward
- Alina Limited is a manufacturer of widgets orders components for use in manufacturing. The estimated demand for the components during the coming year is 15,000. Order costs are $100 per order; carrying costs are $12 per component. Using the economic order quantity model What is Alina Ltd’s optimum order quantity? If the supplier guarantees a three (3) day delivery on any order that is placed, What is the re-order point?arrow_forwardDemand for cars is normally distributed with a mean of 2,700 and a standard deviation of 640. The order quantity is 2,625 units. What is the expected sales (in units)?arrow_forward2. The daily demand for photographic film in a gift store, a tourist site, has normal distribution with 30 average film rolls and 5 standard deviated rolls. The cost of keeping a roll of film in The cost of keeping a roll of film in the store is $0.02 per day. The store incurs a fixed cost of $30 each time it places an order. order. The store's policy is to order 150 rolls when the inventory level drops to 90 rolls, maintaining a constant stock of 30 rolls at all times. a) For this inventory policy, determine the probability of running out of stock during the delivery time. delivery time. b) Determine an inventory policy for the store, assuming that the probability of running out of stock is not greater than 0.0 of running out of stock is no greater than 0.28.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Practical Management ScienceOperations ManagementISBN:9781337406659Author:WINSTON, Wayne L.Publisher:Cengage,
Operations ManagementOperations ManagementISBN:9781259667473Author:William J StevensonPublisher:McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi...Operations ManagementISBN:9781259666100Author:F. Robert Jacobs, Richard B ChasePublisher:McGraw-Hill Education
Purchasing and Supply Chain ManagementOperations ManagementISBN:9781285869681Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. PattersonPublisher:Cengage Learning
Production and Operations Analysis, Seventh Editi...Operations ManagementISBN:9781478623069Author:Steven Nahmias, Tava Lennon OlsenPublisher:Waveland Press, Inc.
Practical Management Science
Operations Management
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:Cengage,
Operations Management
Operations Management
ISBN:9781259667473
Author:William J Stevenson
Publisher:McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi...
Operations Management
ISBN:9781259666100
Author:F. Robert Jacobs, Richard B Chase
Publisher:McGraw-Hill Education
Purchasing and Supply Chain Management
Operations Management
ISBN:9781285869681
Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:Cengage Learning
Production and Operations Analysis, Seventh Editi...
Operations Management
ISBN:9781478623069
Author:Steven Nahmias, Tava Lennon Olsen
Publisher:Waveland Press, Inc.
Inventory Management | Concepts, Examples and Solved Problems; Author: Dr. Bharatendra Rai;https://www.youtube.com/watch?v=2n9NLZTIlz8;License: Standard YouTube License, CC-BY