Problem 6- Fixed Order Interval (FOI)
Demand for walnut fudge ice cream at the Sweet Cream Dairy can be approximated by a normal distribution with a mean of 21 gallons per week and a standard deviation of 3.2 gallons per week. The new manager desires a service level of 90 percent. Lead time is two days, and the dairy is open seven days a week. (Hint: Work in terms of weeks.) |
Use Table B and Table B1. |
a-1. |
If an ROP model is used, what ROP would be consistent with the desired service level? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) |
ROP | gallons |
a-2. |
How many days of supply are on hand at the ROP, assuming average demand? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) |
Days |
b-1. |
If a fixed-interval model is used instead of an ROP model, what order size would be needed for the 90 percent service level with an order interval of 10 days and a supply of 8 gallons on hand at the order time? (Do not round intermediate calculations. Round your final answer to the nearest whole number.) |
Order size | gallons |
b-2. |
What is the probability of experiencing a stockout before this order arrives? (Do not round intermediate calculations. Round your final answer to the nearest whole percent. Omit the "%" sign in your response.) |
Probability | % |
c. |
Suppose the manager is using the ROP model described in part a. One day after placing an order with the supplier, the manager receives a call from the supplier that the order will be delayed because of problems at the supplier’s plant. The supplier promises to have the order there in two days. After hanging up, the manager checks the supply of walnut fudge ice cream and finds that 2 gallons have been sold since the order was placed. Assuming the supplier’s promise is valid, what is the probability that the dairy will run out of this flavor before the shipment arrives? (Do not round intermediate calculations. Round your final answer to the nearest whole percent. Omit the "%" sign in your response.) |
Risk probability | % |
Problem 6- Fixed Order Interval (FOI) Demand for walnut fudge ice cream at the Sweet Cream...
Demand for walnut fudge ice cream at the Sweet Cream Dairy can be approximated by a normal distribution with a mean of 21 gallons per week and a standard deviation of 3.0 gallons per week. The new manager desires a service level of 90 percent. Lead time is two days, and the dairy is open seven days a week. (Hint: Work in terms of weeks.) Use Table B and Table B1. a-1. If an ROP model is used, what ROP...
Demand for walnut fudge ice cream at the Sweet Cream Dairy can be approximated by a normal distribution with a mean of 24 gallons per week and a standard deviation of 3.3 gallons per week. The new manager desires a service level of 90 percent. Lead time is two days, and the dairy is open seven days a week. (Hint: Work in terms of weeks.) Use Table B and Table B1. If an ROP model is used, what ROP would be consistent...
Demand for walnut fudge ice cream at the Sweet Cream Dairy can be approximated by a normal distribution with a mean of 21 gallons per week and a standard deviation of 3.5 gallons per week. The new manager desires a service level of 90 percent. Lead time is 3 days, and the dairy is open seven days a week. (Hint: Work in terms of weeks.) If we use periodic inventory system, the time from delivery of an order until next...
7. A shop has a demand for water is approximated by a normal distribution with a mean of 31 gallons per week and a standard deviation of 4 gallons per week. The manager desires a service level of 90 percent. The lead time is three days, and the shop opens seven days a week. (9 marks) a. If an ROP model is used, what ROP would be consistent with the desired service level? b. If a fixed-interval model is used,...
The Chocolate Ice Cream Company and the Vanilla Ice Cream Company have agreed to merge and form Fudge Swirl Consolidated. Both companies are exactly alike except that they are located in different towns The end-of-period value of each firm is determined by the weather, as shown below. There will be no synergy to the merger State Rainy Warm Hot Probability Value 1 270,000 450,000 905,000 4 5 The weather conditions in each town are independent of those in the other....
Problem 13-14 A jewelry firm buys semiprecious stones to make bracelets and rings. The supplier quotes a price of $8.20 per stone for quantities of 600 stones or more, $8.60 per stone for orders of 400 to 599 stones, and $9.10 per stone for lesser quantities. The jewelry firm operates 111 days per year. Usage rate is 18 stones per day, and ordering costs are $49. a. If carrying costs are $3 per year for each stone, find the order...
Problem 17-4 Cash Discounts (LO 2] You place an order for 1,400 units of Good X at a unit price of $51. The supplier offers terms of 3/20, net 45. a-1. How long do you have to pay before the account is overdue? a-2. If you take the full period, how much should you remit? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) b-1. What is the discount being offered? (Enter your...
Problem 27-6 Using Weighted Average Delay A mail-order firm processes 6,300 checks per month. Of these, 70 percent are for $53 and 30 percent are for $85. The $53 checks are delayed two days on average; the $85 checks are delayed three days on average. Assume 30 days per month a-1.What is the average daily collection float? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) Average daily collection float 210 a-2. How...
Annual demand for a product is 10,920 units; weekly demand is 210 units with a standard deviation of 40 units. The cost of placing an order is $155, and the time from ordering to receipt is four weeks. The annual inventory carrying cost is $0.70 per unit. a. To provide a 90 percent service probability, what must the reorder point be? (Use Excel's NORMSINV() function to find the correct critical value for the given α-level. Do not round intermediate calculations....
Dunstreet's Department Store would like to develop an inventory ordering policy with a 99 percent probability of not stocking out. To illustrate your recommended procedure, use as an example the ordering policy for white percale sheets. Demand for white percale sheets is 4,300 per year. The store is open 365 days per year. Every four weeks (28 days) inventory is counted and a new order is placed. It takes 12 days for the sheets to be delivered. Standard deviation of...