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  • Inventory Homework3

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    Ngọc Đào
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    The document contains two inventory management problems. Problem 1 asks what the unit backorder cost should be for a company that imports sports cars where demand follows a normal distribution with a mean of 10 units and standard deviation of 4 units, and the holding cost is $5 per unit. Problem 2 gives demand, cost, and lead time information for an item and asks to calculate the economic order quantity, reorder point, average inventory on-hand, and provide an opinion on changing the order policy to a fixed quantity of 4 units and reorder point of 3 units.

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    hw 3 inven

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    Inventory_Homework3

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    The document contains two inventory management problems. Problem 1 asks what the unit backorder cost should be for a company that imports sports cars where demand follows a normal distribution with a mean of 10 units and standard deviation of 4 units, and the holding cost is $5 per unit. Problem 2 gives demand, cost, and lead time information for an item and asks to calculate the economic order quantity, reorder point, average inventory on-hand, and provide an opinion on changing the order policy to a fixed quantity of 4 units and reorder point of 3 units.

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    5 views2 pages

    Inventory Homework3

    Uploaded by

    Ngọc Đào
    The document contains two inventory management problems. Problem 1 asks what the unit backorder cost should be for a company that imports sports cars where demand follows a normal distribution with a mean of 10 units and standard deviation of 4 units, and the holding cost is $5 per unit. Problem 2 gives demand, cost, and lead time information for an item and asks to calculate the economic order quantity, reorder point, average inventory on-hand, and provide an opinion on changing the order policy to a fixed quantity of 4 units and reorder point of 3 units.

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    © All Rights Reserved
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    International University, HCMC School of IEM – LSCM Program

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    INVENTORY MANAGEMENT
    HOMEWORK 3
    Problem 1:
    ABC Company brings in sports cars and sells them in the Vietnamese market.
    The monthly demand for these cars follows a normal distribution, and when the
    company places an order, it takes one month for the cars to arrive. The average
    demand during this lead time is 10 units, with a standard deviation of 4 units. To
    maintain a service level of at least 90%, what should be the unit backorder cost?
    The holding cost is $5.
    International University, HCMC School of IEM – LSCM Program
    Student Full name:
    Student ID:

    Problem 2:
    An item that has a demand of 24 units, each costing $125. The holding cost (h)
    per unit is 20% of its cost, which is $25 per unit. This item has a one-month lead
    time, with a fixed order cost of $15 and a unit backorder cost of $150. The
    demand during the lead time follows a Poisson distribution.
    Calculate:
    a) The EOQ,
    b) Reorder Point,
    c) Average Inventory On-hand.
    d) Consider we change the Policy (Q, r) to (4, 3), give your opinion
    regarding the new policy.

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