Operations Management: Processes and Supply Chains, Student Value Edition Plus MyLab Operations Management with Pearson eText -- Access Card Package (12th Edition)
12th Edition
ISBN: 9780134855424
Author: Lee J. Krajewski, Manoj K. Malhotra, Larry P. Ritzman
Publisher: PEARSON
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Textbook Question
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 is
Current on-hand inventory is 1,040 units, with no
- Calculate the item’s EOQ. What is the average time, in weeks, between orders?
- Find the safety stock amid reorder point that provide a 95 cycle-service level.
- For these policies, what are the annual costs of (i) holding the cycle inventory and (ii) placing orders?
- A withdrawal of 15 units just occurred. Is it time to reorder? If so, how much should be ordered?
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Students have asked these similar questions
Please do not give solution in image format thanku
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, Student Value Edition Plus MyLab Operations Management with Pearson eText -- Access Card Package (12th Edition)
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...
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- Wear A Mask (WAM) uses a continuous review system and operates 52 weeks per year with the following characteristics: Demand (d) = 52,505 units/week Ordering cost (S) = $55.00/order Holding cost (H) = $2.50/unit/year ■ Lead time (L) = 3 week(s) Cycle-service level = 90%, z = 1.28 ▪ 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 optimal order quantity? (Enter your response rounded to nearest whole number.)arrow_forwardPlease do not give solution in image format thanku Yuliia is Guest Experience Director at the Lego store. Daily demand averages 450 kits, with a standard deviation of 50 kits. Lead time to receive new shipments is 12 days. Currently, the store policy is to have a level of service of 99.65%. How many units of safety stock will they need to carry? NOTE: This question is asking for SAFETY STOCK, not Reorder Point.arrow_forwardConsider a continuous review inventory system. Demand is normally distributed with an average of 28,000 per month and a monthly standard deviation of 5000 units. LEad time is three weeks (assume four weeks per month). If the firm desires only an 87% cycle service level, how many unitts of safety stock should be held?arrow_forward
- A subcontracting firm Gamma Pharmaceuticals Ltd. located in Western India dealing with generic medicines operates 50 weeks per year. The following information is available regarding the major ingredient used for the medicine:Weekly Demand= 60 unitsStandard deviation of weekly demand = 9 unitsOrdering costs (Co) = Rs. 64/ orderHolding costs (Ch) = Rs.40/unit/yearCycle-service level = 90% (z-value = 1.28)Lead time = 2 weeksNumber of weeks per year = 50 weeksd) Using the fixed order quantity system to control inventory, calculate the EOQe) Compute the reorder point and state the order decision rulef) Compute the total variable cost of inventory.arrow_forwardSKU One is sold at retail store for $8 per unit. SKU One has a weekly demand of 975 units with an average lead time of 5 weeks and a standard deviation of lead time of 2 weeks. Based on the information and a 95% service level, what is the reorder point for SKU One? please show work how to solvearrow_forwardWeekly Average Demand 110 Standard deviation of (weekly) demand 30 Setup cost ($) 1400 Lead time (in weeks) 2 Procurement cost ($) 200 Holding cost /unit/week ($) 3 You are given the demand and inventory related information about a grocery store’s product in the table. The store is open for 46 weeks in a year. What is the reorder point if it wants to achieve a service level of 97%? (Do not round your intermediate calculations. Round your final answers to the nearest whole number.arrow_forward
- Given Information Service Level - 95% (z value= 1.6649) Order Cost - $125Order Cycle (weeks) - 4, 5, 6, 7, 8Lead Time (weeks) - 2 weeksOperating Time - 52 weeks Standard deviation = 69.3237 Variable Holding Cost - 12.019% Fixed Holding Cost - 1,659,317.307 COMPUTE FOR ECONOMIC ORDER QUANTITY (EOQ) PER ORDER CYCLE. THANK YOUUUUUarrow_forward20. A large law firm uses a constant 50 reams of copier paper per day. The lead timefor the paper is approximately normal, averages 9 days, and has a standard deviationof 3 days. What reorder point provides a service level of 90%?arrow_forwardPush versus Pull approach in inventoryarrow_forward
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