Safety stock = z x SDLT = 1.65 x20 = 33
Carrying cost of safety stock = 33x75x0.24 = 594
C is correct.
Cooper Company has average demand of during lead time is 20 units Te item costs S75...
HighLife corporation has the following information: Average demand = 30 units per day Average lead time = 40 days Item unit cost = $45 for orders of less than 400 units Item unit cost = $40 for orders of 400 units or more Ordering cost = $50 Inventory carrying cost = 15% The business year is 300 days Standard deviation of demand during lead time = 90 Desired service level = 95% What is the TAC at $40/unit?
Based on available information, lead time demand for PC jump drives averages 53 units (normally distributed), with a standard deviation of 5 drives. Management wants a 95% service level. Refer to the standard normal table for z-values. a) What value of Z should be applied? (1.04/1.28/2.06/1.65) b) How many drives should be carried as safety stock? __________ units (round your response to the nearest whole number). c) What is the appropriate reorder point? __________ units (round your response to the...
A specific product has demand during lead time of 100 units, with a standard deviation during lead time of 25 units. What safety stock (approximately) provides a 95% service level? The answer is 41. How do you arrive at this answer? (what are the calculations)
Assume an inventory control system for an independent demand item where the Lead-time is 4 days and the Review Period is 15 days. The expected demand for the end-item is 20,000 units per year. Assume, further, that the manager wants to achieve a cycle service level of 95% in her Q system and she knows that the daily average demand is 10 units (demand is normally distributed). She has determined that her facility is open 250 days a year; her...
A) A firm has a daily demand of 450 units. The lead time of receiving supplies is 3 days. If demand has a standard deviation of 100 units per day, what should be their safety stock? The firm plans for a 95% service level. What should be their reorder point? Note: ?0.95 = 1.64. A) This firm decides to increase their service level to 98%. What should be their safety stock? What should be their reorder point? Note: ?0.98 =...
M7_IND5. Peter Sagan is in charge of maintaining hospital supplies at Champs Hospital. During the past year the mean weekly demand for a special type of tubing was 186 packages of this tubing with a standard deviation of 13 packages of tubing. The lead time for receiving this tubing from the supplier is 1.5 weeks. Peter would like to maintain a 95% service level and places an order for 750 packages every time an order is placed. a) How much...
Meena Distributors has an annual demand for an airport metal detector of 1,360 units. The cost of a typical detector to Meena is $400. Carrying cost is estimated to be 18% of the unit cost, and the ordering cost is $27 per order. If Purushottama Meena, the owner, orders in quantities of 300 or more, he can get a 5% discount on the cost of the detectors. Should Meena take the quantity discount? What is the EOQ without the discount?...