20-31 E00, uncertainty, safety stock, reorder point. Phillips Corporation is a major manufacturer of foodprocessors. It purchases motors from Viking Corporation. Annual demand is 52,000 motors per year or 1,000motors per week. The ordering cost is $360 per order. The annual carrying cost is $6.50 per motor. It cur-rently takes 2 weeks to supply an order to the assembly plant.1. What is the optimal number of motors that Phillips's managers should order according to the E00 model?2. At what point should managers reorder the motors, assuming that both demand and purchase-orderlead time are known with certainty?3. Now assume that demand can vary during the 2-week purchase-order lead time. The following tableshows the probability distribution of various demand levels:Total Demand for Motors for 2 Weeks Probability of Demand (sums to 1)1,6000.051,8000.202,0000.502,2000.202,4000.05If Phillips runs out of stock, it would have to rush order the motors at an additional cost of $5 per mo-tor. How much safety stock should the assembly plant hold? How will this affect the reorder point andreorder quantity?

EOQ stands for economic order quantity. It is a company's optimal order quantity that undervalues…

Answered: 1. What is the optimal number of motors…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

See similar textbooks

Similar questions

Discount-Mart, a major East Coast retailer, wants todetermine the economic order quantity (see Chapter 12 for EOQformulas) for its halogen lamps. It currently buys all halogenlamps from Specialty Lighting Manufacturers in Atlanta. Annualdemand is 2,000 lamps, ordering cost per order is $30, and annualcarrying cost per lamp is $12. a) What is the EOQ?b) What are the total annual costs of holding and ordering(managing) this inventory?c) How many orders should Discount-Mart place with SpecialtyLighting per year?
.. 12.41 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 60 (and was normally distributed). Furthermore, the standard deviation for BX-5 was 7. Ms. Flynn would like to maintain a 90% service level. a) What safety stock level do you recommend for BX-5? b) What is the appropriate reorder point? PX ..12.42 Based on available information, lead time demand for PC jump drives averages 50 units (normally distributed), with a stand- ard deviation of 5 drives. Management wants a 97% service level. a) What value of Z should be applied? b) How many drives should be carried as safety stock? c) What is the appropriate reorder point? Px ... 12.43 Authentic Thai rattan chairs (shown in the photo) are delivered to Gary Schwartz's chain of retail stores, called The Kathmandu Shop, once a year. The reorder point, without safety stock, is 200 chairs. Carrying cost is $30 per unit per year, and the cost…
QUESTIONS 1-6. Suppose the ABC Snack Company sells a Potato Chip product that has a constant annual demand rate of 3,600 bags of chips. Each bag costs ABC $3.00, and each order costs $20.00. Holding costs are 25% of the value of inventory. ABC has 250 working days per year, and the lead time is 5 days. Identify the following aspects of inventory policy. (b) (c) Question 2. What is the reorder point (in days)? Question 3. How long is the cvcle time (T, in days)?
Demand for a popular athletic shoe is nearly constant at 1600 pairs per week for a regional division of a national retailer. The cost per pair is $64. It costs $75 to place an order, and annual holding costs are charged at 25% of the cost per unit. The lead time is 3 weeks. One year has 52 weeks.a. What is the Economic Order Quantity?b. What is the reorder point?c. What is the cycle time?d. What is the total annual cost?
Alocal whole seller for Lipton tea estimates an annual demand of tea at 3900 kgs. It costs RO 100 to make and receive an order, and it takes 16 workdays to receive it. The annual holding cost is 25 % of purchase price. The price RO 2 per kg. The company is operating 6 days per week. What is the economic order quantity (EOQ)? Round-up to the nearest integer- O a. 1249 kg O b. 267 kg O c. 395 kg O d. 559 kg O e. None is correct
Yellow Press, Inc., buys paper in 1,500-pound rolls for printing. Annual demand is 3,000 rolls. The cost per roll is $1,000, and the annual holding cost is 28 percent of the cost. Each order costs $75. Part 2 a. How many rolls should Yellow Press order at a time? Yellow Press should order enter your response here rolls at a time. (Enter your response rounded to the nearest whole number.) Part 3 b. What is the time between orders? (Assume 200 workdays per year.) The time between orders is enter your response here days. (Enter your response rounded to one decimal place.)
Tax Preparers, Inc. works 250 days per year. Th e companyuses adding machine tape at a rate of eight rolls per day. Usageis believed to be normally distributed with a standard deviationof three rolls during lead time. Th e cost of ordering the tape is$10, and holding costs are $0.30 per roll per year. Lead time istwo days.(a) Calculate the economic order quantity.(b) What reorder point will provide an order-cycle servicelevel of 97 percent?(c) How much safety stock must the company hold to have a97 percent order-cycle service level?(d) What reorder point is needed to provide an order-cycleservice level of 99 percent?(e) How much safety stock must the company hold to have a99 percent order-cycle service level?
Intan Store sells 240,000 cabinets per year. Based on the company's policy, a safety stock of 4 percent from yearly sales is to be maintained. The carrying cost is RM0.60 per unit annually and the ordering costs are RM150.00. The delivery time is 10 days. Order should be placed in multiple of 100 units. i. Compute the economic order quantity (assume 360 days per year). ii. Compute the total inventory cost. iii. Compute the reorder inventory level. iv. Compute the average inventory please answer complete
A local distributor for a national tire company expects to sell approximately 8,660 tires of a certain size and tread design next year. Annual carrying cost is $15 per tire and ordering cost is $67. The distributor operates 283 days a year. a. What is the EOQ? (Round your answer to a whole number.) EOQ b. How many times per year does the store reorder? (Round your answer to two decimal points.) Number of Orders per Year c. What is the length of an order cycle? (Round your answer to two decimal points.) Length of Order Cycle d. What will the total annual carrying and ordering cost be if the EOQ quantity is ordered? (Round your answer to a whole number.) Total Annual Inventory Cost Novt
32) ABC Shop ABC shop uses glue at a daily rate that is normally distributed with a mean of 250 ounces and a standard deviation of 26 ounces. When the shop places an order for glue it requires 9 days for the order to arrive. What is the Reorder Point if the shop wants an 84% Service Level? Round to an integer value. Group of answer choices a) 2,347 ounces b) 1,538 ounces c) 1,967 ounces d) 2,307 ounces e) 2,327 ounces f) 1,558 ounces
A local distributor for a national tire company expects to sell approximately 9,600 steelbelted radial tires of a certain size and tread design next year. Annual carrying cost is $16per tire, and ordering cost is $75. The distributor operates 288 days a year.a. a. What is the EOQ?b. How many times per year does the store reorder? c. What is the length of an order cycle?d. What will the total annual cost be if the EOQ quantity is ordered?
Barbara Flynn is in charge of maintaining hospital supplies at General Hospital. During the past year, themean lead time demand for bandage BX-5 was 60 (and wasnormally distributed). Furthermore, the standard deviationfor BX-5 was 7. Ms. Flynn would like to maintain a 90%service level. a) What safety stock level do you recommend for BX-5?b) What is the appropriate reorder point?

SEE MORE QUESTIONS

Recommended textbooks for you

Practical Management Science

Operations Management

ISBN:

9781337406659

Author:

WINSTON, Wayne L.

Publisher:

Cengage,

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

Practical Management Science

Operations Management

ISBN:

9781337406659

Author:

WINSTON, Wayne L.

Publisher:

Cengage,

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

Business in Action

Operations Management

ISBN:

9780135198100

Author:

BOVEE

Publisher:

PEARSON CO

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.

SEE MORE TEXTBOOKS