Chapter 4. Tyler is hoping to get a lot of custom cake and cookie orders in his new bakery for various parties and celebrations. He considers keeping a stock of celebratory helium balloons in his bakery so that he can sell them alongside the cakes and cookies to add more value for his customers. However, he knows that the demand for custom goods as well as the balloons is like to be probabilistic in nature instead of deterministic. He is trying to create a model of how many balloons to order to keep in stock to minimize the costs of inventory in his little bakery. He identifies the following characteristics and needs your help in filling out the table given below the information. • Ordering Cost is $22.00 per order Cost of balloons is $3.00 per balloon • The bakery uses the 15% annual holding cost rate for all inventory • The lead tỉme for a new order of helium balloons is 14 days. • Data from other bakeries indicate that the demand during the 14-day lead time follows a normal probability distribution with a weekly mean of 20 balloons and a standard deviation of 5 balloons per week. • The number of working days per year is 300 • Acceptable probability of a stock-out, for Tyler is 10% or 0.10. Average Inventory Level (Q'/2)+S balloons Optimal Inventory Policy Reorder Point r balloons Economic Order Quantity Q* balloons Annual Inventory Holding Cost H Number of Orders per Year (D/Q") dollars Annual Ordering Cost Cycle Time (Days) T days dollars Safety Stock S balloons Total Annual Cost TC dollars Maximum Inventory Level Q*+ S Expected Stockouts per Year SO balloons
Chapter 4. Tyler is hoping to get a lot of custom cake and cookie orders in his new bakery for various parties and celebrations. He considers keeping a stock of celebratory helium balloons in his bakery so that he can sell them alongside the cakes and cookies to add more value for his customers. However, he knows that the demand for custom goods as well as the balloons is like to be probabilistic in nature instead of deterministic. He is trying to create a model of how many balloons to order to keep in stock to minimize the costs of inventory in his little bakery. He identifies the following characteristics and needs your help in filling out the table given below the information. • Ordering Cost is $22.00 per order Cost of balloons is $3.00 per balloon • The bakery uses the 15% annual holding cost rate for all inventory • The lead tỉme for a new order of helium balloons is 14 days. • Data from other bakeries indicate that the demand during the 14-day lead time follows a normal probability distribution with a weekly mean of 20 balloons and a standard deviation of 5 balloons per week. • The number of working days per year is 300 • Acceptable probability of a stock-out, for Tyler is 10% or 0.10. Average Inventory Level (Q'/2)+S balloons Optimal Inventory Policy Reorder Point r balloons Economic Order Quantity Q* balloons Annual Inventory Holding Cost H Number of Orders per Year (D/Q") dollars Annual Ordering Cost Cycle Time (Days) T days dollars Safety Stock S balloons Total Annual Cost TC dollars Maximum Inventory Level Q*+ S Expected Stockouts per Year SO balloons
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter12: Queueing Models
Section12.4: Important Queueing Relationships
Problem 6P
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