Mancuso's Music Store is a small business that sells instruments, books, stands, and other music-related products. The owner always likes to have extra musicstands in storage in case a large order arrives suddenly – typically 2 weeks' worth of sales. When an order is placed, the delivery takes 5 business days to arive.The owner has studied working capital management and estimates that the economic order quantity for music stands is 1500 for each time an order is placed. Thefixed cost of an order is $210 and the carrying cost per stand per year is $1.70. How many music stands will the store have in stock immediately after a shipmentarrives? Assume the store is closed on Sundays (a 6-day business week), holidays, and a few vacation days, so that the store has 300 business days per year. Giveyour answer rounded to the nearest whole number of music stands. Do not include comma separators in your answer.

The question is related to Inventory Management. The Economic Order Quantity is that level of…

Answered: Mancuso's Music Store is a small…

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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Mancuso's Music Store is a small business that sells instruments, books, stands, and other music-related products. The owner always likes to have extra music stands in storage in case a large order arrives suddenly - typically 2 weeks' worth of sales. When an order is placed, the delivery takes 5 business days to arrive. The owner has studied working capital management and estimates that the economic order quantity for music stands is 1500 for each time an order is placed. The fixed cost of an order is $210 and the carrying cost per stand per year is $1.70. How many music stands will the store have in stock immediately after a shipment arrives? Assume the store is closed on Sundays (a 6-day business week), holidays, and a few vacation days, so that the store has 300 business days per year. Give your answer rounded to the nearest whole number of music stands. Do not include comma separators in your answer.
A restaurant uses 5,000 quart bottles of ketchup each year. The ketchup costs $3.00 per bottle and is served only in whole bottles because its taste quickly deteriorates. The restaurant figures that it costs $10.00 each time an order is placed, and holding costs are 20 percent of the purchase price. It takes 3 weeks for an order to arrive. The restaurant operates 50 weeks per year. The restaurant would like to use an inventory system that minimizes inventory cost. The restaurant has figured that the most economical order size or EOQ is approx. 409 (rounding up the decimals). Suppose that things have become uncertain and that customer demand is no more constant. Customer demand is now normally distributed with mean being the same as given in the problem description and standard deviation = 30 units per week. The supply source is still very reliable and as a result the lead time is constant. Find out the safety stock needed to achieve 95% customer service level. O 55 65 075 85 None of…
The Big Buy Supermarket stocks Munchies Cereal. Demand for Munchies is 4,000 boxes peryear (365 days). It costs the store $60 per order of Munchies, and it costs $0.80 per box per yearto keep the cereal in stock. Once an order for Munchies is placed, it takes 4 days to receive theorder from a food distributor. Determine The optimal order size
Dayton Electronics demands a part at a daily rate of 100 units. The lead time for replenishment is 5 days for this item. The standard deviation of demand during the lead time is 6. Dayton Electronics prides itself on having a high level of customer service and strives to achieve a service level of 99%. How much safety stock should Dayton Electronics hold for this item? What will be the annualized cost of this safety stock if the opportunity cost of capital for Dayton Electronics is 15% and the item costs $1607 Click the icon to view the table for the 2-values for the given probabilities. The safety stock is units. (Enter your response rounded up to the next whole number) Reference Standard Normal Table Service level 0.90 0.95 0.98 0.99 Print z value 1.28 1.05 2.05 2.33 Done X
The Kirei-Hana Japanese Steak House in San Francisco consumes 3,000 pounds of sirloin steak each month.Yama Hirai, the new restaurant manager, recently completed an MBA degree. He learned that the steak was replenished using an EOQ value of 2,000 pounds. The EOQ value was computed assuming an interest rate of 36 percent per year. Assume that the current cost of the sirloin steak to the steak house is $4 per pound.a. What is the setup cost used in determining the EOQ value? Mr. Hirai received an offer from a meat wholesaler in which a discount of 5 percentwould be given if the steak house purchased the steak in quantities of 3,000 pounds or more.b. Should Mr. Hirai accept the offer from the wholesaler? If so, how much can be saved?c. Because of Mr. Hirai’s language problems, he apparently misunderstood the offer. In fact, the 5 percent discount is applied only to the amounts ordered over 3,000 pounds. Should this offer be accepted, and if so, how much is now saved?
Henrique Correa's bakery prepares all its cakes between 4 A.M.and 6 A.M.so they will be fresh when customers arrive. Day-old cakes are virtually always sold, but at a 50% discount off the regular $8 price. The cost of baking a cake is $5,and demand is estimated to be normally distributed, with a mean of 25 and a standard deviation of 7. What is the optimal stocking level?
At sejahtera.com, a large retailer of popular books, demand is constant at 32,000 books per year. The cost of placing an order to replenish stock is $10, and the annual cost of holding is $4 per book. Stock is received five working days after an order has been placed. The backordering is not allowed. Assume 300 working days a year. a. calculate sejahtera.com’s optimal order quantity. b. calculate the optimal number of orders per year c. Calculate the optimal interval (in working days) between orders. d. Determine the demand during the lead time. e. Determine the reorder point. f. Determine the inventory position immediately after an order has been placed. g. Draw the model to represent the case.
Catlea Merchandising is engaged in selling school shoesfor both boys and girls in their teenage years. Catlea needs 32,000 pairs of shoes in a year in order to satisfy the market demand. It costs ₱ 48 to place an order while ₱ 8 is needed to hold each quantity of shoe in Catlea's inventory. Upon checking on Catlea's supplier, it takes 8 days in between placing an order and eventually receiving it. a. Determine the Economic Order Quantityb. Determine the number of order per monthc. Determine the reorder point
Acme stamping produces seat brackets for a major manufacturer of stadium seating. They sell an average of 57,000 brackets per year. Their stamping machine operates for 8 hours per day, 250 days per year and can produce 150 brackets per hour. It costs them $370 to set up the stamping machine for a production run. The brackets cost $0.47 each to make, and Acme uses 20% of the unit cost to estimate the annual inventory holding cost. Calculate the economic production quantity for seat brackets.
The annual demand for pollock (a type of fish) at Ant Kitchens is 1000 pounds. The per pound cost of Pollock for Ant Kitchens $4.00. Fish are delivered frozen from the supplier three weeks after the order is placed. Each time an order of Pollack is received, Ant incurs $200 in handling costs to store the Pollack for use. Ant Kitchens cost of capital is 20%. Assume 50 weeks in a year. a) If Ant currently orders pollock 4 times per year, what are the inventory ordering and holding costs associated with this policy? b) What is the optimal continuous review ordering policy for pollock at Ant? What is the cost of this policy? How does this answer compare to part a? c) If Ant Kitchens follows the inventory policies above, how long does the company hold the average pound of pollock in inventory in each case? What is the inventory turnover? Interpret these quantities in a sentence.
6. Leaky Pipe, a local retailer of plumbing supplies, faces demand for one of its SKUs at a constant rate of 17,000 units per year. It costs Leaky Pipe $5 to process an order to replenish stock and $2.00 per unit per year to carry the item in stock. Stock is received 12 working days after an order is placed. No backordering is allowed. Assume 365 working days a year. d. The demand during lead time is _____ units. (Enter your response rounded to the nearest whole number.) e. The reorder point is ______ units. (Enter your response rounded to the nearest whole number.) f. The inventory position immediately after an order has been placed is _____ units. (Enter your response rounded to the nearest whole number.)
Jantel Mitchell's bakery prepares all its cakes between 4 A.M.and 6 A.M.so they will be fresh when customers arrive. Day-old cakes are virtually always sold, but at a 50% discount off the regular $16 price. The cost of baking a cake is $10, and demand is estimated to be normally distributed, with a mean of 25 and a standard deviation of 7. What is the optimal stocking level? Refer to the standard normal table for z-values. The optimal stocking level for the bakery is cakes (round your response to the nearest whole number).

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