Concept explainers
In a P system, the lead time for a box of weed-killer is 2 weeks and the review period is 1 week. Demand during the protection interval averages 218 boxes, with a standard deviation of 40 boxes.
- What is the cycle-service level when the target invent tory is set at 300 boxes?
- In the fall season, demand for weed-killer decreases but also becomes more highly variable. Assume that during the fall season, demand during the protection interval is expected to decrease to 180 boxes, but with a standard deviation of 50 boxes. What would be the cycle-service level if management keeps the target inventory level set at 300 boxes?
Want to see the full answer?
Check out a sample textbook solutionChapter 9 Solutions
Operations Management: Processes and Supply Chains, Student Value Edition Plus MyLab Operations Management with Pearson eText -- Access Card Package (12th Edition)
Additional Business Textbook Solutions
Loose-leaf for Operations Management (The Mcgraw-hill Series in Operations and Decision Sciences)
Operations Management
Operations Management: Sustainability and Supply Chain Management (12th Edition)
OPERATIONS MANAGEMENT IN THE SUPPLY CHAIN: DECISIONS & CASES (Mcgraw-hill Series Operations and Decision Sciences)
Principles of Operations Management: Sustainability and Supply Chain Management (10th Edition)
- Barbara Flynn is in charge of maintaining hospital supplies at General Hospital. During the past year, the mean lead time demand for bandage BX-5 was 70 (and was normally distributed). Furthermore, the standard deviation for BX-5 was 6. Ms. Flynn would like to maintain a 90% service level. Refer to the standard normal table for z-values. a) What safety stock level do you recommend for BX-5? Safety Stock=_____ units b) What is the appropriate reorder point? Reorder point=____units Z 0.38 0.50 0.67 0.84 1.04 1.28 1.41 1.56 1.65 1.75 2.06 2.33 Pr(Z) 65 69 75 80 85 90 92 94 95 96 98 99arrow_forwardA retailer uses a periodic review order-up-to model to control the inventory of one of its high volume products. Average demand is 2580 units per week with a standard deviation of 1270. The review period is 5 weeks, the lead time is 11 weeks, and the safety factor used is 0.61. How many stockouts should the retailer expect for this product next year?arrow_forwardThe daily demand for meat pies at a specific vendor is known to be normally distributed with a mean of 300 and a standard deviation of 50. How many meat pies should the vendor make in order to ensure that he runs short on no more than 20% of days?arrow_forward
- Peter 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_forwardDuring the last 5 weeks, demands for a certain SKU at a retailer were 7 units (5 weeks ago), 4 units, 4 units, 4 units, and 5 units (last week). The retailer uses a period review model with order-up-to level 71 units, a review period of 2 weeks, and the lead time is 11 weeks. It is time to order. How much should the retailer order?arrow_forward
- 28arrow_forwardUniversity of Florida football programs are printed 1 week prior to each home game. Attendance averages 90,000 screaming and loyal Gators fans, of whom two-thirds usually buy the program, following a normal distribution, for $5 each. Unsold programs are sent to a recycling center that pays only 10 cents per program. The standard deviation is 5,000 programs, and the cost to print each program is $1. Refer to the standard normal table for z-values. a) What is the cost of underestimating demand for each program? Cs = $ (round your response to two decimal places). b) What is the overage cost per program? = $ (round your response to two decimal places). c) How many programs should be ordered per game? programs should be ordered per game (round your response to the nearest whole number). d) What is the stockout risk for this order size? Stockout risk = (round your response to four decimal places).arrow_forwardKVS Pharmacy stocks a popular brand of over the counter flu and cold medicine. The average demand for the medicine is six packages per day, with a standard deviation of 1.2 packages. A vendor for the pharmaceutical company checks KVS’s stock every 60 days. During one visit, the store had eight packages in stock. The lead time to receive an order is five days. Determine the order size for this order period that will enable KVS to maintain a 95% service level.arrow_forward
- GameStop has maintained 75% service level for inventory of PlayStation 5. Mean demand during lead time is 166 PlayStations, and the standard deviation during lead time is 58 PlayStations. The annual cost of carrying one PlayStation in inventory is $12. The store’s operations analyst recently told GameStop's management that they could expect a $550 improvement in profit (based on current figures of cost per PlayStation) if the service level were increased to 97.5%. Is it worthwhile for GameStop to make this change?arrow_forwardUniversity of Florida football programs are printed 1 week prior to each home game. Attendance averages 90,000 screaming and loyal Gators fans, of whom two-thirds usually buy the program, following a normal distribution, for $5 each. Unsold programs are sent to a recycling center that pays only 10 cents per program. The standard deviation is 5,000 programs, and the cost to print each program is $2. Refer to the standard normal table for z-values. Part 2 a) What is the cost of underestimating demand for each program? Cs=$________ (round your response to two decimal places). Part 3 b) What is the overage cost per program? Co=$_______ (round your response to two decimal places). Part 4 c) How many programs should be ordered per game? ________ programs should be ordered per game (round your response to the nearest whole number). Part 5 d) What is the stockout risk for this order size? Stockout risk=________ (round your response to four decimal places).arrow_forwardDaily demand for a product is 100 units, with a standard deviation of 25 units. The review period is 10 days and the lead time is 6 days. At the time of review, there are 50 units in stock. If 98 percent of service probability is desired, how many units should be ordered?arrow_forward
- Practical Management ScienceOperations ManagementISBN:9781337406659Author:WINSTON, Wayne L.Publisher:Cengage,Operations ManagementOperations ManagementISBN:9781259667473Author:William J StevensonPublisher:McGraw-Hill EducationOperations 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 LearningProduction and Operations Analysis, Seventh Editi...Operations ManagementISBN:9781478623069Author:Steven Nahmias, Tava Lennon OlsenPublisher:Waveland Press, Inc.