Use Appendix 14A EShack sells an ergonomic keyboard in one of its stores. Average weekly demand for this keyboard follows a Poisson distribution with mean 0.6 unit. It submits orders to the supplier weekly and the supplier delivers with a 1-week lead time. (Round your answer to 1 decimal place.) a. Suppose it uses an order-up-to level of 5. What is its average order quantity? (Round your answer to 1 decimal place.) b. Suppose it uses an order-up-to level of 9. What is its expected on-hand inventory? (Round your answer to 1 decimal place.) c. Suppose it uses an order-up-to level of 6. What is its expected on-order inventory? (Round your answer to 4 decimal places.) d. Suppose it uses an order-up-to level of 7. What is its in-stock probability? (Round your answer to 4 decimal places.) e. Suppose it uses an order-up-to level of 4. What is its stockout probability? 1. Suppose it wants a 1 in-stock probability. What should its order-up-to level be? 100000

Use Appendix 14A EShack sells an ergonomic keyboard in one of its stores. Average weekly demand for this keyboard follows a Poisson distribution with mean 0.6 unit. It submits orders to the supplier weekly and the supplier delivers with a 1-week lead time. (Round your answer to 1 decimal place.) a. Suppose it uses an order-up-to level of 5. What is its average order quantity? (Round your answer to 1 decimal place.) b. Suppose it uses an order-up-to level of 9. What is its expected on-hand inventory? (Round your answer to 1 decimal place.) c. Suppose it uses an order-up-to level of 6. What is its expected on-order inventory? (Round your answer to 4 decimal places.) d. Suppose it uses an order-up-to level of 7. What is its in-stock probability? (Round your answer to 4 decimal places.) e. Suppose it uses an order-up-to level of 4. What is its stockout probability? 1. Suppose it wants a 1 in-stock probability. What should its order-up-to level be? 100000

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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Green Grass Industries Limited (GGIL) has used a fixed-time period inventory system that involved taking a complete inventory count of all items each month. However, increasing labor costs, are forcing GGIL, to examine alternative ways to reduce the amount of labor involved in inventory stockrooms, yet without increasing other costs, such a shortage costs. Table 10 is a random sample of 20 GGIL's items. Table 10. Annual Usage by Value of a sample of GGIL's Inventory Item Number Annual Usage ($) Item Number Annual Usage ($) 1 10,600 11 2,750 2 14,000 12 1,400 3 4,000 13 3,200 4 16,000 14 2,500 5 8,100 15 110,000 1,800 16 14,800 7 84,000 17 9,500 8. 890 18 1,700 9 940 19 3,700 10 94,000 20 12,500 a) What would you recommend GGIL to do to cut back its labor cost? (Illustrate using an ABC plan). b) Item 18 is critical to continued operations at GGIL. i. How would you recommend it be classified? ii. Give the reason(s) for your answer.
Fisk Corporation is trying to improve its inventory control system and has installed an online computer at its retail stores. Fisk anticipates sales of 112, 500 units per year, an ordering cost of $3 per order, and carrying costs of $1.20 per unit. a. What is the economic ordering quantity? b. How many orders will be placed during the year? c. What will the average inventory be? d. What is the total cost of ordering and carrying inventory?
ABC Corporation resells one type of candle. It has 250 working days. Each day, it sells an average of 500 boxes but maysometimes sell a maximum of 600 boxes. The supplier takes an average of 5 days to deliver the order. During busier times, thesupplier may take 7 days.Based on ABC’s records, ordering cost average P400 per order. Storage cost per box average P5 per year. There is also anopportunity cost of 1% per year for every peso invested in inventories. Each box of candles costs P450. If ABC would continue its current inventory management policy, it would keep 10,000 boxes as safety stock and order ten-days-worth of inventory. (B) Economic Order Quantity 1. How much would the total inventory related (ordering plus carrying) costs be if the economic order quantity wasfollowed (excluding safety stock)? (D) Cost-Benefit Analysis: If ABC maintains its current inventory policy for the year,1. How much would the entity save it followed the reorder point and economic order quantity models?…
ABC Corporation resells one type of candle. It has 250 working days. Each day, it sells an average of 500 boxes but maysometimes sell a maximum of 600 boxes. The supplier takes an average of 5 days to deliver the order. During busier times, thesupplier may take 7 days.Based on ABC’s records, ordering cost average P400 per order. Storage cost per box average P5 per year. There is also anopportunity cost of 1% per year for every peso invested in inventories. Each box of candles costs P450. If ABC would continue its current inventory management policy, it would keep 10,000 boxes as safety stock and order ten-days-worth of inventory. 18. Explain what would happen to the ordering cost, carrying cost and total inventory-related costs if the entity doesnot follow the economic order quantity based on the previous numbers
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14. 12 The purchasing manager for the Atlantic Steel Company must determine a policy for ordering coal to operate 12 converters. Each converter requires exactly 5 tons of coal per day to operate, and the firm operates 360 days per year. The purchasing manager has determined that the ordering cost is $80 per order and the cost of holding coal is 20% of the average dollar value of inventory held. The purchasing manager has negotiated a contract to obtain the coal for $12 per ton for the coming year. a. Determine the optimal quantity of coal to receive in each order. (Ans: 1200 tons) b. Determine the total inventory-related costs associated with the optimal ordering policy (do not include the cost of the coal). (Ans: TC= $2880) c. If 5 days of lead time are required to receive an order of coal, how much coal should be on hand when an order is placed? (Ans= R=300 tons)
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