A small copy center uses 5 560-sheet boxes of copy paper a week.
Experience suggests that usage can be well approximated by a normal
distribution with a mean of 5 boxes per week and a standard
deviation of .50 boxes per week. 2 weeks are required to fill an
order for letterhead stationery. Ordering cost is $5, and annual
holding cost is 34 cents per box.
Use Table.
a. Determine the economic order quantity, assuming
a 52-week year. (Round your answer to the nearest whole
number.)
EOQ
boxes
b. If the copy center reorders when the supply on
hand is 12 boxes, compute the risk of a stockout. (Round
"z" value to 2 decimal places and final answer to 4 decimal
places.)
Risk
c. If a fixed interval of 6 weeks is used for
ordering instead of an ROP, how many boxes should be ordered if
there are currently 24 boxes on hand, and an acceptable stockout
risk for the order cycle is .0228? (Round "z" value to 2
decimal places and final answer to the nearest whole
number.)
Q0
Reorder point is the quantity level that is reached when the inventory on hand drops to this level. The four determinants of the reorder point quantity are the usage rate, lead time, demand variability, lead time variability and the degree of stock out risk.
A small copy center uses 5 560-sheet boxes of copy paper a week. Experience suggests that...
A small copy center uses 6 420-sheet boxes of copy paper a week. Experience suggests that usage can be well approximated by a normal distribution with a mean of 6 boxes per week and a standard deviation of .60 boxes per week. 2 weeks are required to fill an order for letterhead stationery. Ordering cost is $6, and annual holding cost is 35 cents per box. Use Table. a. Determine the economic order quantity, assuming a 52-week year. (Round your...
A small copy center uses five 500-sheet boxes of copy paper a week. Experience suggests that usage can be well approximated by a normal distribution with a mean of five boxes per week and a standard deviation of one-half box per week. One weeks are required to fill an order for letterhead stationery. Ordering cost is $3, and annual holding cost is 25 cents per box. Use Table. a. Determine the economic order quantity, assuming a 52-week year. (Round your...
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...
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...
Clap Off Manufacturing uses 2,400 switch assemblies per week and then reorders another 2,400. Assume the relevant carrying cost per switch assembly is $6.10 and the fixed order cost is $565. a. Calculate the carrying costs. (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) b. Calculate the restocking costs. (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) c. Calculate the economic order quantity. (Do...
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University of Florida football programs are printed 1 week prior to each home game. Attendance averages 90,000 screaming and loyal Gators fans, of whom two-thirds usually buy the program, following a normal distribution, for $55 each. Unsold programs are sent to a recycling center that pays only 10 cents per program. The standard deviation is 10,000 programs, and the cost to print each program is $11. Refer to the standard normal table LOADING... for z-values. a) What is the cost...
A mail-order house uses 16,260 boxes a year. Carrying costs are 60 cents per box a year, and ordering costs are $96. The following price schedule applies. Number of Boxes Price per Box 1,000 to 1,999 $1.25 2,000 to 4,999 1.20 5,000 to 9,999 1.15 10,000 or more 1.10 a. Determine the optimal order quantity. (Round your answer to the nearest whole number.) Optimal order quantity boxes b. Determine the number of orders per year. (Round...
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...
Problem 13-3 A large bakery buys flour in 25-pound bags. The bakery uses an average of 1,215 bags a year. Preparing an order and receiving a shipment of flour involves a cost of $10 per order. Annual carrying costs are $75 per bag. a. Determine the economic order quantity. (Round your final answer to the nearest whole number.) Economic order quantity bags b. What is the average number of bags on hand? (Round your final answer to the...