Kelly's Service Station does a large business in tune-ups. Demand has been averaging 280 spark plugs per week. Holding costs are $0.04 per plug per week, and reorder costs are estimated at $10 per order. Kelly's does not want to be out of stock on more than 1% of his orders. There is a one-day delivery time. The standard deviation of demand is five plugs per day. Assume a normal distribution of demand during lead time and a seven-day work week. (The station operates 52 weeks per year.) (a) What inventory policy do you suggest for Kelly's station? (Round the order size and the reorder point to the nearest whole number and the cycle time to two decimal places.) Kelly's service station should order spark plugs every weeks when the supply reaches (b) What is the average amount of safety stock for the reorder point for part (a)? (Round your answer to the nearest whole number.) (c) What is the total variable weekly cost including safety stock cost (in dollars)? (Round your answer to two decimal places.) $

Kelly's Service Station does a large business in tune-ups. Demand has been averaging 280 spark plugs per week. Holding costs are $0.04 per plug per week, and reorder costs are estimated at $10 per order. Kelly's does not want to be out of stock on more than 1% of his orders. There is a one-day delivery time. The standard deviation of demand is five plugs per day. Assume a normal distribution of demand during lead time and a seven-day work week. (The station operates 52 weeks per year.) (a) What inventory policy do you suggest for Kelly's station? (Round the order size and the reorder point to the nearest whole number and the cycle time to two decimal places.) Kelly's service station should order spark plugs every weeks when the supply reaches (b) What is the average amount of safety stock for the reorder point for part (a)? (Round your answer to the nearest whole number.) (c) What is the total variable weekly cost including safety stock cost (in dollars)? (Round your answer to two decimal places.) $

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...

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Please do not give solution in image formate thanku. Weekly demand for HP printers at a Sam's Club store is normally distributed, with a mean of250 and a standard deviation of 150. The store manager continuously monitors inventory andcurrently orders 1,000 printers each time the inventory drops to 600 printers. HP currentlytakes two weeks to fill an order. How much safety inventory does the store carry? What CSLdoes Sam's Club achieve as a result of this policy? What fill rate does the store achieve?Ex:. Return to the Sam's Club store in . Assume that the supply lead time from HP isnormally distributed, with a mean of 2 weeks and a standard deviation of 1.5 weeks. Howmuch safety inventory should Sam's Club carry if it wants to provide a CSL of 95 percent?
Golden Crust Bakery buys flour in 25-pound bags. The bakery uses an average of 1,215 bags a year. Preparing an order and receiving a shipment of flour involves a cost of $10 per order. Annual holding costs are $75 per bag. Once an order for flour is placed, it takes six (6) days to receive the order from the flour factory. The bakery operates 350 days per year. Calculate the following: Economic Order Quantity Expected number of orders (Order Frequency) Average inventory The annual holding cost The annual ordering cost The total annual cost of inventory management Reorder point If holding costs were to increase by $9 per year, how much would that affect the minimum total annual cost?
A small grocery store sells fresh produce, which it obtains from a local farmer. During the strawberry season, demand for fresh strawberries can be reasonably approximated using a normal distribution with a mean of 40 quarts per day and a standard deviation of 6 quarts per day. Excess costsrun 35 cents per quart. The grocer orders 49 quarts per day.a. What is the implied cost of shortage per quart?
40 Gentle Ben's Bar and Restaurant uses 5,000 quart bottles of an imported wine each year. The effervescent wine costs $3 per bottle and is served only in whole bottles because it loses its bubbles quickly. Ben figures that it costs $10 each time an order is placed, and holding costs are 20 percent of the purchase price. It takes three weeks for an order to arrive. Weekly demand is 100 bottles (closed two weeks per year) with a standard deviation of 30 bottles. Ben would like to use an inventory system that minimizes inventory cost and will provide a 95 percent service probability. a. What is the economic quantity for Ben to order? Note: Round your answer to the nearest whole number.
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 75 (and was normally distributed). Furthermore, the standard deviation for BX-5 was 6. Ms. Flynn would like to maintain a 95% service level. a) What safety stock level do you recommend for BX-5? Safety stock = _ units (round response to the nearest whole number).
A company begins a review of ordering policies for its continuous review system by checking the cur- rent policies for a sample of SKUs. Following are the characteristics of one item. Demand (D) = 64 units/week (Assume 52 weeks per year), Ordering or setup cost (S) = $50/order, Holding cost (H) = $13/unit/year, Lead time (L) = 2 weeks, Standard deviation of weekly demand = 12 units, Cycle-service level = 88 percenta. What is the EOQ for this item? b. What is the desired safety stock? c. What is the reorder point? d. What are the cost implications if the current policy for this item is Q 200 and R 180?
Stroheim’s is a dry goods store located in downtown Milwaukee, Wisconsin. Stroheim’s placesorders weekly with their suppliers for all of their reorders. The lead time for men’s briefs is4 days. Stroheim’s uses a 95 percent service level. Assuming a Type 1 service, what is the orderup to level for the briefs? Assume demands for briefs are uncertain with daily mean demandof 20 and daily standard deviation of 12
Dalia, the office manager of a desktop publishing outfit, stocks replacement toner cartridges for laser printers. Demand for cartridges is approximately 30 per year and is quite variable (Le., can be represented using the Poisson distribution). Cartridges cost $100 each and require three weeks to obtain from the vendor. Dalia uses a (Q, r) approach to control stock levels (a). If Dalia wants to restrict replenishment orders to twice per year on average, what batch size Q should she use? If she wants to ensure a service level (i.e., probability of having the cartridge in stock when 2 out of 2 needed) of at least 98 percent, what reorder point r should she use? (Hint: Use Table 2.6.(b). If Dalia is willing to increase the number of replenishment orders per year to six, how do Q and r change? Explain the difference in r.
KVS Pharmacy fills prescriptions for a popular children’santibiotic, Amoxycilin. The daily demand for Amoxycilinis normally distributed with a mean of 200 ounces and a standard deviation of 80 ounces. The vendor for the phar-maceutical firm that supplies the drug calls the drug-store’s pharmacist every 30 days and checks the inventory of Amoxycilin. During a call the druggist indicated thestore had 60 ounces of the antibiotic in stock. The leadtime to receive an order is four days. Determine the order size that will enable the drugstore to maintain a 99% ser-vice level.
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?
University 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? C = $4 (round your response to two decimal places). b) What is the overage cost per program? Co = $.9 (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).
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