please solve it on a paper A retail chain has 6stores in a region supplied from 3 supply sources. Trucks have a capacity of 25000units and cost $(1027) per load plus $(95.5)per delivery. The cost of holding one unit in inventory at retailfor a year is $1.5. The managers will set upmilk runs from suppliers to retail stores. Assume that all truckstravel full. Suppliers are considering whether to run a milk run to 2 stores or 3stores on each truck.Determine a demand threshold in selection of the two options given

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Answered: region supplied from 3 supply sources.…

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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TT Beverage Co. is a distributor of beer, wine and soft drinks product. From amain warehouse located in Magusa, TRNC, TT supplies nearly 1000 retail stores withbeverage products. The beer inventory, which constitutes about 40% of the company’stotal inventory, averages approximately 50 000 cases. With an average cost per case ofapproximately 8MU, TT estimates the value of its beer inventory to be 400 000 MU.The warehouse manager has decided to do a detailed study of inventory costsassociated with Sergio Beer, the # 1 selling TT beer. The purpose of the study is toestablish the “how-much to order,” and “when to order” decisions for Segio Beer thatwill result in the lowest possible cost.The manager found that the demand is constant and 2 000 cases/week.The cost ofholding for the TT beer inventory is 25% of the value of the inventory.(Note that definding the holding cost as a % of the value of the product isconvenient, because it is easily transferable to other products)TT is paying 32…
Weekly demand for diesel fuel at a department of parks depot is 250 gallons. The depot operates 52weeks a year. Weekly usage is normal and has a standard deviation of 14 gallons. Holding cost forthe fuel is $1 a month, and it costs $20 in administrative time to submit an order for more fuel. Ittakes one-half week to receive a delivery of diesel fuel. Determine the amount of safety stock thatwould be needed if the manager wantsa. An annual service level of 98 percent. What is the implication of negative safety stock?b. The expected number of units short per order cycle to be no more than five gallons.
Garden Variety Flower Shop uses 750 clay pots a month. The pots are purchased at $2 each.Annual carrying costs per pot are estimated to be 30 percent of cost, and ordering costs are $20per order. The manager has been using an order size of 1,500 flower pots.a. What additional annual cost is the shop incurring by staying with this order size?b. Other than cost savings, what benefit would using the optimal order quantity yield?
Suppose the Motorboat dealership in part (a) above dealing in costly motorboats follows the policy of carrying a few units in stock and ordering for replenishment as soon as a motorboat is sold from the stock. The unit cost of the motorboat is $60,000 and the holding or carrying cost is $5,000 per unit per year. The management of Motorboat dealership believe that the shortage cost due to waiting for the motorboat is $2,000 per unit short per month. The demand is seen to be Poisson distributed with an average rate of 2 units per month and the replenishment lead time can be considered to be exponential with a mean of one month. Considering the system as an M/M/s queuing system, find the optimal stock to be carried which can minimize the sum total of carrying and shortage costs.
7. Shipments of Product Q from a plant to a wholesaler are made in lots of 400. The wholesaler's average demand for Q is 150 units per week. Lead time from plant to wholesaler is 5 weeks. The wholesaler pays for the shipments when they leave the plant. The plant has proposed several new lead time and lot size options to the wholesaler (see table below). If the wholesaler's goal is to minimize total cycle plus pipeline inventories, which option should the wholesaler select? OPTION CURRENT 1 2 3 SHIPMENT LOT SIZE 400 500 800 1,000 PLANT-TO- WHOLESALER LEAD A. option #1 B. option #2 C. option #3 D. remain with the current option TIME 5 4 3 2
A firm uses a one-week periodic review inventory system. A two-day lead time is needed for any order, and the firm is willing to tolerate an average of one stock-out per year.a. Using the firm’s service guideline, what is the probability of a stock-out associated with each replenishment decision?b. What is the replenishment level if demand during the review period plus lead-time period is normally distributed with a mean of 60 units and a standard deviation of 12 units?c. What is the replenishment level if demand during the review period plus lead-time period is uniformly distributed between 35 and 85 units?
Jack Ltd is a market leader in the manufacture of apple juice. They operate areorder level system of inventory management, and the following information isavailable for green apples:Average usage 800 per dayMinimum usage 540 per dayMaximum usage 1260 per dayLead time for replenishment 16-20 dayReorder quantity 19,500 applesRequired:a. Calculate the reorder level
40. An import/export firm has leased 20,000 cubic feet of storage space to store six items that it imports from the Far East. The relevant data for the six items it plans to store in the warehouse are Space per Unit (feet) Annual Demand Item (units) Cost per Unit DVD 32-inch flat screen TV 1,600 Blank DVD's 800 $200.00 150.00 30.00 12 18 8,000 (box of 10) Blank CD's 12,000 18.00 2 (box of 50) Compact stereo Telephone 400 1,200 250.00 24 12.50 3 Setup costs for each product amount to $2,000 per order, and holding costs are based on a 25 percent annual interest rate. Find the optimal order quantities for these six items so that the storage space is never exceeded. (Hint: Use a cell location for the Lagrange multiplier and experiment with different values until the storage constraint is satisfied as closely as possible.)
The Uptown Kiln is an importer of ceramics from overseas. It has arranged to purchase a particular type of ceramic pottery from a Korean artisan. The artisan makes the pottery in 120-unit batches and will ship only that exact number of units. The transportation and handling cost of a shipment is $7,600 (not including the unit cost). The Uptown Kiln estimates its annual demand to be 900 units. What storage and handling cost per unit does it need to achieve in order to minimize its inventory cost?
Prince Electronics, a manufacturer of consumer electronic goods, has five distribution centers in different regions of the country. For one of its products, a high-speed modem priced at $350 per unit, the average weekly demand at each distribution center is 75 units. Average shipment size to each distribution center is 400 units, and average lead time for delivery is 2 weeks. Each distribution center carries 2 weeks’ supply as safety stock but holds no anticipation inventory.a. On average, how many dollars of pipeline inventory will be in transit to each distribution center?b. How much total inventory (cycle, safety, and pipeline) does Prince hold for all five distribution centers?
A bookstore has an annual demand for 44,000 copies of a best-selling book. It costs $0.50 to store one copy for one year, and it costs $80 to place an order. Find the optimum number of copies per order. A. 3,752 copies B. 5,307 copies C. 4,530 copies OD. 3,377 copies
8) What are the procedures for issuing materials? 9) How are the levels of replenishment determined? 10) Why should there be a minimum and maximum level of stock maintained at the warehouse

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region supplied from 3 supply sources. Trucks ha plus $(95.5)per delivery. The cost of holding one ers will set upmilk runs from suppliers to retail sto dering whether to run a milk run to 2 stores or 3st d in selection of the two options given