Operations Management: Processes And Supply Chains (12th Edition) (what's New In Operations Management)
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 9, Problem 20P

Your firm uses a continuous review system and operates 52 weeks per year. One of the SKus has the following characteristics. Demand  ( D ) = 2 0 , 000  units/year Ordering cost  ( S ) = $ 4 0 /order Holding cost  ( H ) = $ 2unit/year Lead time  ( L ) = 2 weeks Cycle-service level = 95

Demand is normally distributed, with a standard deviation of weekly demand of 100 units.

Current on-hand inventory is 1,040 units, with no scheduled receipts and no backorders.

  1. Calculate the item’s EOQ. What is the average time, in weeks, between orders?
  2. Find the safety stock amid reorder point that provide a 95 cycle-service level.
  3. For these policies, what are the annual costs of (i) holding the cycle inventory and (ii) placing orders?
  4. A withdrawal of 15 units just occurred. Is it time to reorder? If so, how much should be ordered?

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A pharmacist is trying to determine the inventory order and stock levels for a particular drug. The following information is available about the drug. Demand (D) 85 tablets/week Working weeks per year 52 weeks Unit holding cost per year (H) $6 Order cost (S) $44/order Standard deviation of weekly demand (sd) 15 tablets Lead time (L) 2 weeks Desired cycle service level 95% If the pharmacist uses the continuous review (Q) system to control the inventory of the drug, what would be the order quantity and reorder point? If the pharmacist uses the periodic review (P) system to control the inventory of the drug, what would be the review interval and target inventory level? (Hint: Use the EOQ model to derive the review interval P)
Wear A Mask (WAM) uses a continuous review system and operates 52 weeks per year. One of the SKUs has the following characteristics. ▪ Demand (D) = 20,600 units/year ▪ Ordering cost (S) = $55.00/order Holding cost (H) = $4.4/unit/year ▪ Lead time (L) = 3 week(s) Cycle-service level = 90%, z = 1.28 H . ▪ Demand is normally distributed, with a standard deviation of weekly demand of 103 units. ▪ Current on-hand inventory is 1,040 units, with no scheduled receipts and no backorders. What is the annual cost of holding the cycle inventory? (Please wait and round at the end of the calculations, enter your response rounded to 2 decimal places.) 880

Chapter 9 Solutions

Operations Management: Processes And Supply Chains (12th Edition) (what's New In Operations Management)

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...

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