Mr Mathebula sells high end music systems. He orders his products once a year. His re-order point without any safety stock is 500 units. Inventory cost is R25 per month and the cost of a stock-out is R200 per set per year. Given the following demand probabilities determine a recommended safety stock level.
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- Weiss’s paint store keeps an inventory of white latex paint product in the gallon size. The manager reviews the stock level every 4 months. Demand is observed to be normally distributed with a monthly mean of 28 gallons and a standard deviation of 8. Re-supply lead time is 2.5 months. The store manager targets a 98 percent in-stock probability during the lead time. • What is the target inventory position?At Matthews Car Repair, customer demand for a certain brand of motor oil is normally distributed with a mean of 15 gallons and a standard deviation of 6 work-days. To be 95% sure that Compact Car Repair will not run out of oil, we should reorder when motor oil in stock is less than _______ gallons. a. 24.9 b. 22.6 c. 23.7 d. 20Abdullah records the following monthly purchases and sales of an item. Month Number bought Cost of each unit (€) Number sold November 110 22 73 December 60 26 71 January February March 70 30 49 50 28 53 80 24 37 April 40 32 71 Assuming he has no opening stock (Before November), 1. What is the remaining stock at the end of the period (April)? 2. What is the cost (cost of purchase) of the total inventory (Currency in Saudi Riyals))? 3. If each unit is sold for 35SR, What is the income for Abdullah's company till end of April?
- Annual demand is 16000 units, cost per order is $75 and carrying cost per unit as a percentage is 10%. The company works 250 weeks a year; the lead-time on all orders placed is 6 working days. Assuming constant lead-time demand, and a unit cost of $45 what is the economic order quantity? What is the reorder point. If lead-time demand shows variability that follows a normal distribution with a mean μ =420 and a standard deviation σ =20, what will the revised reorder point if two stock-outs (shortages) are allowed? What is the company’s reorder point if the probability of a stock-out on any cycle is restricted to 0.05?uỹ this policy? 2. Question 14 on page 217 14. A local machine shop buys hex nuts and molly screws from the same supplier. The hex nuts cost 15 cents each and the molly screws cost 38 cents each. A setup cost of $100 is assumed for all orders. This includes the cost of tracking and receiving the orders. Holding costs are based on a 25 percent annual interest rate. The shop uses an average of 20,000 hex nuts and 14,000 molly screws annually. a. Determine the optimal size of the orders of hex nuts and molly screws, and the optimal time between placement of orders of these two items. b. If both items are ordered and received simultaneously, the setup cost of $100 applies to the combined order. Compare the average annual cost of holding and setup if these items are ordered separately; if they are both ordered when the hex nuts would normally be ordered; and if they are both ordered when the molly screws would normally be ordered. 99+ W T DOLLIn determining open-to-buy, what is subtracted from planned purchases? O On hand On order EOM stock BOM stock Question 37 Your department is planning a 10 percent increase in sales for the entire three- month period (February-April). Sales for the period last year were $19,000. Fifty percent of the total planned sales are projected to occur in March, and 25 percent of sales are planned to occur in each of the other two months. Planned stock-sales ratio for each month is 2.0. Total planned reductions for the period are 5 percent of planned sales. Reductions are projected to occur for each month as follows: February (10 percent), March (40 percent), and April (50 percent). An ending inventory of $5,000 is planned for the period. PLANNED PURCHASES FOR FEBRUARY ARE: O $24,200 O $15.779 O None (overbought). $10.895.50
- .. 12.41 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 60 (and was normally distributed). Furthermore, the standard deviation for BX-5 was 7. Ms. Flynn would like to maintain a 90% service level. a) What safety stock level do you recommend for BX-5? b) What is the appropriate reorder point? PX ..12.42 Based on available information, lead time demand for PC jump drives averages 50 units (normally distributed), with a stand- ard deviation of 5 drives. Management wants a 97% service level. a) What value of Z should be applied? b) How many drives should be carried as safety stock? c) What is the appropriate reorder point? Px ... 12.43 Authentic Thai rattan chairs (shown in the photo) are delivered to Gary Schwartz's chain of retail stores, called The Kathmandu Shop, once a year. The reorder point, without safety stock, is 200 chairs. Carrying cost is $30 per unit per year, and the cost…QUESTIONS 1-6. Suppose the ABC Snack Company sells a Potato Chip product that has a constant annual demand rate of 3,600 bags of chips. Each bag costs ABC $3.00, and each order costs $20.00. Holding costs are 25% of the value of inventory. ABC has 250 working days per year, and the lead time is 5 days. Identify the following aspects of inventory policy. (b) (c) Question 2. What is the reorder point (in days)? Question 3. How long is the cvcle time (T, in days)?11. Determine planned purchases (a) at retail and (b) at cost for a month with the following planned figures: Round to the nearest dollar. Sales $148,000 Markdowns 8,400 BOM Stock 310,500 EOM Stock 340,000 Markup 48%
- 04/30/2 Problem #1 - Jasper Inc., a company that sells air conditioning units for cars intends to reduce its total annual inventory cost. The annual demand is expected to be 6,000 units if market conditions are unfavorable, and 9,000 units if market conditions are favorable. The Purchasing & Warehousing Manager estimates that the ordering cost is $20.00 per order and the holding cost is $2.00 per unit per year. a. - Calculate the Economic Order Quantity (EOQ), Annual Ordering Cost, Annual Holding Cost and Total Annuarinventory Cost under unfavorable and favorable market conditions. b. - The Purchasing & Warehousing Manager identified two improvement projects in conjunction with her team: Project A: Reduction of ordering cost to $18.00. Project B: Reduction of holding cost to $1.40 per unit per year. Which project would result in greater reduction of the EOQ and Total Annual Inventory Cost? Which of the projects would you recommend and why? Show all your calculations.Jam costs $10/jar, requires a 6mo. lead time, and will sell for $35/jar. If you stock out, you'll face a $25/jar loss of goodwill. Placing an order costs $50, and money that is tied up in capital is assumed to have a 20% interest rate for calculating holding costs. During the 6-mo replenishment time, he sells ~100 jars, but with substantial variation. Estimates are a standard deviation of demand during each 6-mo period of 25 jars. Assume demand is described by a normal distribution. How should the Jam be ordered?Weiss’s paint store uses a (Q, R) inventory system to control its stock levels. For a particularly popular white latex paint, historical data show that the distribution of monthly demand is approximately normal, with mean 28 and standard deviation 8. Replenishment lead time for this paint is about 14 weeks. Each can of paint costs the store $6. Although excess demands are back-ordered, the store owner estimates that unfilled demands cost about $10 each in bookkeeping and loss-of-goodwill costs. Fixed costs of replenishment are $15 per order, and holding costs are basedon a 30 percent annual rate of interest.a. What are the optimal lot sizes and reorder points for this brand of paint?b. What is the optimal safety stock for this paint?