Operations Management: Processes and Supply Chains (11th Edition)
11th Edition
ISBN: 9780133872132
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 5P
Haley Photocopying purchases paper from an out-of-state vendor. Average weekly demand for paper is 150 cartons per week for which Haley pays $15 per carton. Inbounds shipments from the vendor average 1,000 cartons with an average lead time of 3 weeks. Haley operates 52 weeks per year; it carries a 4-week supply of inventory as safety stock and no anticipation inventory. The vendor has recently announced that they will be building a facility near Haley Photocopying that will reduce lead time to 1 week. Further, they will be able to reduce shipments to 200 cartons. Haley believes that they will be able to reduce safety stock to a 1-week supply. What impact will these changes make to Haley’s average inventory level and its average aggregate inventory value?
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Haley Photocopying purchases paper from an out-of-state vendor. Average weekly demand for paper is 140 cartons per week for which Haley pays $30 per carton.
Inbound shipments from the vendor average 1,050 cartons with an average lead time of 2 weeks. Haley operates 52 weeks per year; it carries a 3-week supply of
inventory as safety stock and no anticipation inventory. The vendor has recently announced that they will be building a facility near Haley Photocopying that will
reduce lead time to one week. Further, they will be able to reduce shipments to 500 cartons. Haley believes that they will be able to reduce safety stock to a 1-week
supply. What impact will these changes make to Haley's average inventory level and its average aggregate inventory value?
The changes decrease Haley's average aggregate inventory level by cartons. (Enter your response as a whole number.)
The changes decrease Haley's average aggregate inventory value by $
(Enter your response as a whole number.)
Haley Photocopying purchases paper from an out-of-state vendor. Average weekly demand for paper is 130 cartons per week for which Haley pays $25 per carton. Inbound shipments from the
vendor average 1,250 cartons with an average lead time of 2 weeks. Haley operates 52 weeks per year; it carries a 3-week supply of inventory as safety stock and no anticipation inventory. The
vendor has recently announced that they will be building a facility near Haley Photocopying that will reduce lead time to one week. Further, they will be able to reduce shipments to 100 cartons.
Haley believes that they will be able to reduce safety stock to a 1-week supply. What impact will these changes make to Haley's average inventory level and its average aggregate inventory value?
The changes decrease Haley's average aggregate inventory level by
cartons. (Enter your response as a whole number.)
Haley Photocopying purchases paper from an out-of-state vendor. Average weekly demand for paper is 160 cartons per week for which Haley pays $20 per carton. Inbound shipments from the vendor average 850 cartons with an average lead time of 4 weeks. Haley operates 52 weeks per year; it carries a 5 week supply of inventory as safety stock and no anticipation inventory. The vendor has recently announced that they will be building a facility near Haley Photocopying that will reduce lead time to one week nothing. Further, they will be able to reduce shipments to 400 cartons. Haley believes that they will be able to reduce safety stock to a 1 week supply.
What impact will these changes make to Haley's average inventory level and its average aggregate inventory value?
The changes decrease Haley's average aggregate inventory value by $ (Enter your response as a whole number.)
The changes decrease Haley's average aggregate inventory value by $ (Enter your response as a whole…
Chapter 9 Solutions
Operations Management: Processes and Supply Chains (11th 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 - Prob. 1CCh. 9 - Prob. 2C
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
2. Identify four people who have contributed to the theory and techniques of operations management.
Operations Management
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
What are the three major business functions, and how are they related to one another? Give specific examples.
Operations Management, Binder Ready Version: An Integrated Approach
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)
Many companies including Company OM tried to implement dynamic pricing in their ticketing system. The dynamic p...
Principles of Operations Management: Sustainability and Supply Chain Management (10th Edition)
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
- Haley Photocopying purchases paper from an out-of-state vendor. Average weekly demand for paper is 160 cartons per week for which Haley pays $20 per carton. Inbound shipments from the vendor average 750 cartons with an average lead time of 2 weeks. Haley operates 52 weeks per year; it carries a 3-week supply of inventory as safety stock and no anticipation inventory. The vendor has recently announced that they will be building a facility near Haley Photocopying that will reduce lead time to one week. Further, they will be able to reduce shipments to 300 cartons. Haley believes that they will be able to reduce safety stock to a 1-week supply. What impact will these changes make to Haley's average inventory level and its average aggregate inventory value? The changes decrease Haley's average aggregate inventory level by _____cartons. (Enter your response as a whole number.)arrow_forwardHaley Photocopying purchases paper from an out-of-state vendor. Average weekly demand for paper is 110 cartons per week for which Haley pays $10 per carton. Inbound shipments from the vendor average 800 cartons with an average lead time of 5 weeks. Haley operates 52 weeks per year; it carries a 6-week supply of inventory as safety stock and no anticipation inventory. The vendor has recently announced that they will be building a facility near Haley Photocopying that will reduce lead time to three weeks. Further, they will be able to reduce shipments to 100 cartons. Haley believes that they will be able to reduce safety stock to a 3-week supply. What impact will these changes make to Haley's average inventory level and its average aggregate inventory value? The changes decrease Haley's average aggregate inventory level by nothing cartons. (Enter your response as a whole number.) The changes decrease Haley's average aggregate inventory value by $nothing. (Enter your…arrow_forwardHaley Photocopying purchases paper from an out-of-state vendor. Average weekly demand for paper is 170 cartons per week for which Haley pays $25 per carton. Inbound shipments from the vendor average 950 cartons with an average lead time of 5 weeks. Haley operates 52 weeks per year; it carries a 6-week supply of inventory as safety stock and no anticipation inventory. The vendor has recently announced that they will be building a facility near Haley Photocopying that will reduce lead time to to week. Further, they will be able to reduce shipments to 300 cartons. Haley believes that they will be able to reduce safety stock to a 1-week supply. What impact will these changes make to Haley's average inventory level and its average aggregate inventory value?arrow_forward
- Haley Photocopying purchases paper from an out-of-state vendor. Average weekly demand for paper is 150 cartons per week for which Haley pays $15 per carton. Inbound shipments from the vendor average 1000 cartons with an average lead time of 3 weeks. Haley operates 52 weeks per year; it carries a 4-week supply of inventory as safety stock and no anticipation inventory. The vendor has recently announced that they willbe building a facility near Haley Photocopying that will reduce lead time to one week. Further, they will be able to reduce shipments to 200 cartons. Haley believes that they will be able to reduce safety stock to a 1-week supply. What impact will these changes make to Haley’s average inventory level and its average aggregate inventory value?arrow_forwardSouthern Markets, Inc., is considering the use of ABC analysis to focus on the most critical SKUs in its inventory. Currently, there are approximately 20,000 different SKUs with a total dollar usage of $10,000,000 per year.a. What would you expect to be the number of SKUs and the total annual dollar usage for A items, B items, and C items at Southern Markets, Inc.?350 PART 2 Managing Customer Demandb. The following table provides a random sample of the unit values and annual demands of eight SKUs. Categorize these SKUs as A, B, and C items.SKU Code Unit Value Demand (Units)A104 $2.10 2,500D205 $2.50 30X104 $0.85 350U404 $0.25 250L205 $4.75 20S104…arrow_forwardSafari Bar and Restaurant uses 5,000 quart bottles of an imported wine each year. The effervescent wine costs $5 per bottle and is served in whole bottles only since it loses its bubbles quickly. The manager figures that it costs $10 each time an order is placed, and holding costs are 30 percent of the purchase price per bottle per year. It takes four weeks for an order to arrive. Weekly demand has a Normal distribution with an average of 100 bottles and a standard deviation of 30 bottles. Safari Bar and Restaurant closes two weeks per year. The manager would like to use an inventory system that minimizes inventory cost and will satisfy 90 percent of his customers who order this wine. Round your answers to the nearest integer. What is the economic order quantity for the manager to order? A. 258 bottles B. 500 bottles C. 316 bottles D. 408 bottles What is the expected demand during lead-time? A. 200 bottles B. 400 bottles C. 300 bottles D. 100 bottlesarrow_forward
- Use the information below to answer the following question(s). Office Supply House purchases 4,160 reams of paper per year, ordered in lots of 80 reams per week at $150 per ream. The vendor covers all shipping costs. Office Supply House is not required to inspect the shipment upon entry. Office Supply House earns 20% on its cash investments. The purchase order lead time is two weeks. The following cost data are available: Relevant ordering costs per purchase order $53.75 Relevant insurance, materials handling, breakage, and so on, per year $4.25 How many deliveries will be required at the economic order quantity level? 42 deliveries 18 deliveries 52 deliveries 20 deliveries 37 deliveriesarrow_forwardInvestigate how demand variability affects the overall effectiveness of the Wilson approach in inventory management.arrow_forwardSam's Pet Hotel operates 52 weeks per year, 6 days per week, and uses a continuous review inventory system. It purchases kitty litter for $13.00 per bag. The following information is available about these bags: ≻Demand=75 bags/week ≻Order cost=$55.00/order ≻Annual holding cost=25 percent of cost ≻Desired cycle-service level=80 percent ≻Lead time=4 weeks (24 working days) ≻Standard deviation of weekly demand=15 bags ≻Current on-hand inventory is 320 bags, with no open orders or backorders. Part 2 a. Suppose that the weekly demand forecast of 75 bags is incorrect and actual demand averages only 50 bags per week. How much higher will total costs be, owing to the distorted EOQ caused by this forecast error? The costs will be $enter your response here higher owing to the error in EOQ. (Enter your response rounded to two decimal places.) a. What is the EOQ? What would the average time between orders (in weeks)? b. What should R be? c. An inventory withdraw…arrow_forward
- Michigan State figurines Inc. sells Crystal figurines to spartan fans. They buy the figurines from the manufacture for $19 per unit. They send orders electronically to the manufacturer, cost and $33 per order and they experience an average sleep time of six days for each order to arrive from the manufacture. Their inventory Karen cost is 20%. The average daily demand for the figurines is two units per day. They are open for business 250 days a year. Answer the following questions. I am struggling with the last two.arrow_forwardA 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)arrow_forwardEarthbound Corporation is a manufacturer and distributor of air conditioning systems. You have been engaged to install an accounting system for Earthbound period among the inventory control features earthbound desires as part of the system are indicators of how much to order and when period. The following information is furnished for a product called “Hydronix” which is carried in inventory: Hydronix are sold by the gross (12 dozen) at a list price of P800 per gross FOB shipper. John receives a 40% trade discount off list price on purchases in gross lots. Freight cost is P20 gross from the shipping point to John's plant John uses about 5,000 Hydronix during 259-day production year and must purchase a total of 36 gross per year to allow for normal breakage. Minimum and maximum usages are 12 and 28, respectively. It takes 20 working days (normal delivery time) to receive an order from the date the purchase request is initiated. A rush order in full gross lots can be received by air…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Purchasing and Supply Chain ManagementOperations ManagementISBN:9781285869681Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. PattersonPublisher:Cengage Learning
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
Inventory Management | Concepts, Examples and Solved Problems; Author: Dr. Bharatendra Rai;https://www.youtube.com/watch?v=2n9NLZTIlz8;License: Standard YouTube License, CC-BY