Problem 2. The annual demand for a specific product is 3,500 units and has the following ordering and holding costs: Co = $20.50 per order and C₁ = $8.00 per unit. Demand exhibits some variability such that the lead-time demand follows a normal probability distribution with µ = 45 units and σ = 12 units. Answer the next questions, Problem 2 parts a - f. Attach your Excel file in Problem 2g. Problem 2a. What is the recommended order quantity for this product? Express your answer as a whole number using standard rounding rules. Problem 2b. 231 Order Quantity = units If the manager sets the reorder point at 55 units, what is the probability of a stockout in any given order cycle? Express your answer as a decimal to 4 decimal places using standard rounding rules. Probability of a stockout = 0.0082 Problem 2c. Given the probability of a stockout in problem 2b, how many times would expect a stockout to occur during the year if the reorder point 55 units were used? Express your answer to 2 decimal places using standard rounding rules. Number of order cycles with a stockout = 0.39 order cycles Using the information in Problem 2, assume that the company wants at most a 2% probability of a stockout during any given order cycle. Answer the following questions: Problem 2d. ( What is the Z-value if the company wants at most a 2% probability of a stockout? Express your answer to 2 decimal places using standard rounding rules. Z = Problem 2e. ( What is the reorder point if the company wants at most a 2% probability of a stockout? Express your answers as a whole number using standard rules. Problem 2f. ( ROP = units ) How much of the reorder point in problem 2e will consist of safety stock? Express your answers as a whole number using standard rules. Safety Stock = units
Problem 2. The annual demand for a specific product is 3,500 units and has the following ordering and holding costs: Co = $20.50 per order and C₁ = $8.00 per unit. Demand exhibits some variability such that the lead-time demand follows a normal probability distribution with µ = 45 units and σ = 12 units. Answer the next questions, Problem 2 parts a - f. Attach your Excel file in Problem 2g. Problem 2a. What is the recommended order quantity for this product? Express your answer as a whole number using standard rounding rules. Problem 2b. 231 Order Quantity = units If the manager sets the reorder point at 55 units, what is the probability of a stockout in any given order cycle? Express your answer as a decimal to 4 decimal places using standard rounding rules. Probability of a stockout = 0.0082 Problem 2c. Given the probability of a stockout in problem 2b, how many times would expect a stockout to occur during the year if the reorder point 55 units were used? Express your answer to 2 decimal places using standard rounding rules. Number of order cycles with a stockout = 0.39 order cycles Using the information in Problem 2, assume that the company wants at most a 2% probability of a stockout during any given order cycle. Answer the following questions: Problem 2d. ( What is the Z-value if the company wants at most a 2% probability of a stockout? Express your answer to 2 decimal places using standard rounding rules. Z = Problem 2e. ( What is the reorder point if the company wants at most a 2% probability of a stockout? Express your answers as a whole number using standard rules. Problem 2f. ( ROP = units ) How much of the reorder point in problem 2e will consist of safety stock? Express your answers as a whole number using standard rules. Safety Stock = units
A First Course in Probability (10th Edition)
10th Edition
ISBN:9780134753119
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Chapter1: Combinatorial Analysis
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NEED TO KNOW "PART 2d - PART 2f" PLEASE!
Transcribed Image Text:Problem 2. The annual demand for a specific product is 3,500 units and has the
following ordering and holding costs: Co = $20.50 per order and C₁ = $8.00 per unit.
Demand exhibits some variability such that the lead-time demand follows a normal
probability distribution with µ = 45 units and σ = 12 units.
Answer the next questions, Problem 2 parts a - f. Attach your Excel file in Problem
2g.
Problem 2a.
What is the recommended order quantity for this product?
Express your answer as a whole number using standard rounding rules.
Problem 2b.
231
Order Quantity =
units
If the manager sets the reorder point at 55 units, what is
the probability of a stockout in any given order cycle? Express your answer as a
decimal to 4 decimal places using standard rounding rules.
Probability of a stockout =
0.0082
Problem 2c.
Given the probability of a stockout in problem 2b, how
many times would expect a stockout to occur during the year if the reorder point
55 units were used? Express your answer to 2 decimal places using standard
rounding rules.
Number of order cycles with a stockout =
0.39
order cycles
Transcribed Image Text:Using the information in Problem 2, assume that the company wants at most a 2%
probability of a stockout during any given order cycle. Answer the following
questions:
Problem 2d. (
What is the Z-value if the company wants at most a 2%
probability of a stockout? Express your answer to 2 decimal places using standard
rounding rules.
Z =
Problem 2e. (
What is the reorder point if the company wants at most a
2% probability of a stockout? Express your answers as a whole number using
standard rules.
Problem 2f. (
ROP =
units
) How much of the reorder point in problem 2e will consist of
safety stock? Express your answers as a whole number using standard rules.
Safety Stock =
units
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