section Prawwane AND CawrmoLLNE TH Suvty CHAIN w sets tobe delivered. Standard deviation of demand for the sheets is five per day. There ae curently 150 sheets on hand, z ow many sheets shold you onder? ‘Chat’ Pizza onerll fs pepperoni, olives anchovies, and mozzarella cheese toe shipped ‘cil fom Haly, An American distributor stops by every four weeks to take orders. Becuse the orders are shipped dtety frm Ital, they take three weeks fo arive. Chale’ Pizza uses an average of 150 pounds of pepperoni each week witha standard Jvition 030 pounds, Charlie's prides isl cn fering only the Best-quaity ingredients and high level of ‘service sot wants to ensue & 98 percent probly of nx stocking out on pepperoni. “Assume thit the sles representative just walked inthe door and there are curently 500 pounds of pepperoni inthe walkin cooler. How many pounds of pepperoni would you order? Given the following information, formulate an inventory management system. The item is demanded 50 weeks a year emcee sn ‘sand deviation oF Order ost 25000 eli demand a5 per week Annuslholng cost) agefitemcest—Uexdtime week ‘nual derend 250 service probably 95% erage dea 55 per wee 4, Stat the onder quantity and rower poi 5, Determine the annual holding and onder cos {fa price break of $50 per order was oflered for purchase quantities of over 2,00, would you take advantage of i? How mach would you save annually? Licutenant Commander Data i panning to make his monthly (every 30 days) tek to Gamma Fiydrs City to pick up supply of salina chips. The wip wil ake Data about two days. Before eaves, he cll in the order to the GHC Supply Stor. He uses chips at an average rate of five per day (seven days per week wih a standard deviation of demand of one pe day. He needs & 458 percent service probability If he curently has 35 chips in inventor, how many should he ‘order? What isthe most he wll ever have to order? Sits 4 Shop bays two prt Tepiws and Widgets) for use in its production system from 660 ‘ferent sppliers. The pars are needed throughout the entire 52-week year. Tepciws are used ta relatively constant ale and are ondered whenever the remsining quanity drops 0 the reordet level. Widgets ae ordete from a suplir who stops by every three weeks. Data for both products ae as follows tro ‘oom Wet era ean ‘upe0 9000 Hol cet Petite con) 20% Seup or ore cont S000 sapc0 Leadiire does tek Softy tock Sounts suns temcot Seam __s200 ‘a What isthe inventory conto system for Togdiws? Thats, whats the reorder quantity and vat she feoeder point? i, Whats the inventory contol system for Widgets? ‘Demand fora items ,000 units er yea. Each order placed costs S10; the annual cost to camry items in inventory i $2 each. ‘a, In what quantities sould the item be ordered? '. Supposing a $100 discount om each ore is given if orders are placed in quantities of SOD ‘or move. Should orders te placed in quantities of S00, or should you stick tothe decision you made in? “Te anual demand fra product is 15,600 units, The weekly demands 300 units with a tam dard deviation of 90 units. The cos to place an order is $31.20, andthe time fom ordering receipt is four weeks. The annual inventory carving cost is $0.10 per unit. Find the reorder point necessary to provide «98 percent service probabil ‘Suppose the production manager is asked to reduce the safety stock ofthis tem by 50 pet= cent If she des 50, what will the new servie probability be?Iyventony Cont Daily demand fora products 100 units, with standard deviation of 25 unis The veview pri= ‘ds 10 days and the lead time i 6 days. At the time of review ther are 0 units in tock. If ‘9 percent service probability is desired how many units should be ordered? 12. Hem X isa standard tem stocked in «company’s invenory of component parts: Each year the firm ona random basis uses about 2,00 of item X, which costs $25 each Starage costa which include insurance and cost of capital, amount 0 $5 per unit of average inventory. Every time an ‘order spaced for more item Xt ons $10, ‘4, Whenever item X is ordered, wht should the order size be? ’, What isthe annual cost fe ordering item X? ©. What isthe annual os for storing item X? 13 Annual demand fora products 13,000 units; weekly demand is 250 units with standard devi ton of 40 units. The cos of placing an orders $100, and he time fom ordering to receipt is four weeks. The annual inventory carying cost is SO.65 per unit, To provide a 98 percent service probability, what mist the reorder pint be? Suppose the preucton manager i od to rede the safety stock ofthis item by 100 unis, {Wohi is done what will the new service probability be? 14 A particular aw material is available vo a company at three different pics, depending on the Sze ofthe order: ess than pounds ‘20 pe pound 100 pounds to 200 pounds Si per pound More than soo pounds 8p pound ‘The costo place an onder i $40. Annual demand is 3,000 units, Holding (r caryin) costs 25 percent ofthe material price ‘What isthe economic order quantity to buy cach time’? 15- Inthe past Taylor Industries has used a fxed-time period inventory system that involved tak Inga complete inventory count ofall items each month. However increasing labor cost are forcing Taylor Industries to examine altemative ways to reduce the amount of labor involved in inventory stockrooms, yet without increasing eter coss, such as shortage costs. Hee ra dom sample of 20 of Taylor's tems, mm Awa tree At Nowe —Usace Never Usace a eer 2 up 00) a 220 pe. 4 sa000 ‘300 5 ‘feo 1200 6 0 aze0 7 2000 eco 5 13000 61000 ° mo 8 3500 2 ‘seco 2000 ‘4 What would you recommend Taylor do to cut bak ts abo cost (Iustate using an ABC plan) lem 18 serial o continued operations. How would you recommend ithe classified? 16. Gentle Ben's Bar and Resturant uses 5,000 quart Bote ofan imported wine cach year. The Whats the reorder point? Daly demand for «product is 60 units with a standard deviation of 10 units. The review per- ‘od 10 days, and lead te is 2 days. A the ime of review there ae 100 units in stock, If 58 percent service probably is desired, how many units should be ordered? ‘University Drag Pharmaceuticals orders its antibiotics every two weeks (14 days) when a sales person visits fom one of the pharmaceutical companies. Teacyeline is one ofits most pre= eribed antibiotics, with average daily demand of 2,00 capsules. The standard deviation of ‘ily demand was drivel fom examining prescriptions filled over the past thre months and teas fund be 800 capsules. It takes ive days for the order to arive. University Drug would Ike to sats) 99 percent ofthe prescriptions, The salesperson jus rived, and there are cur. remy 25,000 capsules in soe. "ow many capsles shoud be ordered? Sally's Sik Serezning produces specialty Tshirts that are primarily soldat special evens She is uying to decide how many to produce for an upcoming event. During the event itself ‘stich fst ne day, Sally can sll Eshins for $20 apiece. However, when the event ends any Unsold Tshirts are sold Tor $4 apiece. It costs Sally $8 to make a specialty Tshirt. Using Silly’s enimate of demand that follows, how many shins should she produce forthe upcoming event? estas Paonamury ra 5 00 ° = » 600 20 m0 0 eo eS Famous Alben prides himself on beng the Cookie King ofthe West, Small reshly baked cook: jos ae the spect of his shop. Famous Abert has asked fr help o determine the umber of ‘Cookies he shold make each day From an analysis of past demand he estimates demand for cookies as y Deano —__PRonAnEsTy oF Dewan ‘Boo dozen 005 2000 ow 2400 op 200 020 2800 ow coo 205 Bach doven sells for $0.69 and costs $049, which includes handing and transportation. ‘Cookies that ire not soldat the end ofthe day are reduced to $0.29 and sold the Following day ‘day-old merchandise {2 Construct table showing the prot r loses foreach possible quantity ‘5 What is the optimal numberof cookies to make? €. Solve this problem by using marginal analysis ‘Sarah's Mutter Shop has one standard mule that fsa larg variety of cars. Sarah wises ‘nabs a eorder point system fo manage ventory ofthis standard muffler. Use the followingPy 25 Inveyrony Cowrnor information o determine the bes onder size and the reorder point: on dea socomufes ——Orderngeost_ Sg perrcer Standard deviation of Grae per Seve probability gon aly demand working iy hem con Scopermifier —Leadtine 2 wong de Arca holdngcost ——26Kfitemvalie _Werkirg days sco peryeor, Alpha Products ni having a problem trying to contol inventory, There i inset time to devote to alts items equally. Here isa sample of some items stocked, along with the sonal usage ofeach tem expressed in dolar volume. um __ANWALDoULAR UsKoe IBM ANWAL DotLan Ushoe : 1000 « saos00 » 1000 1 4 6 2000 . 2000 . 24000 ° ‘00 ‘ e000 P 00) . "9000 4 ‘cco 4 m0 , "2000 : 10 s 3000 i 2300 : 00 44, Can you suggest system for allocating contol ime? 1, Specify where each item from thelist would be placed. ‘After gradation, you decide to zo ino a patership in an fice supply soe that has existed fora numberof years. Walking through the store nd stockroom, you great dsrepaney im service levels, Some spaces and bins for tems ae completely empty others have supplcg ‘hat ae covered with dust and have obviously been thee along tine. You decide to ake he ‘ject of establishing consistent levels of inventory to meet cusiomer demands. Most of your ‘Supplies are purchase ftom just afew distributors that call on your store once every two weeks, ‘You choose, as your first item for suds, computer printer paper. You examine the sales ‘ecords and purchase orders and find that demand for the past 12 months wa 5.000 bones Using your calculator you sample some days" demands and estimate tha the andar devintion ‘of daily demand is 10 boxes. You also search ou these igure: ost per box of paper Sh ese service ppb: 08 percent Storesapen eer dy Salesperson vt ry to wees Devry time oloning vst ds Using your procedure, how many boxes of paper would be dered if, onthe day the slesper- son cals, 60 boxes are on hand? distributor of large appliances needs o determine the order quantities and reonde points forthe ‘rious products it caries, The following data refer toa specific eftigeratrin is product line: ost place a oder $00 Holding cost 20 percent of proce cost per year os of efrigertor £00 each ena denn 590 refgetors Standud deviation ving lesdtime _sovefigetos Lead ne 15 ‘Consider an even daily demand anda 365-y year «4 What is the economic onder quantity? +. Ifthe distributor wants a97 percent service probability, what reonder point, shouldbe used? hapten 15on section Pransiye axp Contnouuine Tir Surety CAIN 26 eis yourresponsibiity. cost per te Holding cost eran Conder cot Star devistion of diy dean Daley ei ne Because customers generally do not wait fort ‘probably of 8 pereent, sume the demand occurs 365 days pe Yea {4 Determine the erder quantity '. Determine the rorde point 127 UA Hamburger Hamlet (UAH) ples dil oder for is high-volume tems hamburger ties, buns, milk, and 90"on), UAH count is cutent inventory on hand once per day phones in its onder for delivery 24 ours later. Should crdr forthe following conditions: eee ly demand Standard devon of Desired ice probity Hambuge veto 28 CU, Incorporated (CUD, produces copper contest ituses in switches and relays: CUT to dtermine the onder quay, Q, 10 mest he ‘Copper depends on the quantity ordered, Here are price-break and othe data forthe problems pce ofcopper Safa per pound upto 2499 pounds S08 per pnd or orders et wean 2.900 and 00 pounds S080 per pour or order rete ttan 500 pues oral derand 5000 pounds et Holding cont 20 percent per ant per year he prc ofthe copper Orserngeast S30 ‘Which quantity shold be ordered” 28 DAT, Inc, produces digital autiotapes to be used in the consumer audio division, DAT Ia sufficient personel in ts iqvenory supply set fsked you to determine ABC classifieation, she new head of the automotive section of Nichols Department St tocenue that reorder quantities forte various items have ben corey established. You toteatone item and choose Michelin ire, XW size 185 x 14 BSW. perpetual avenion thas been used, 30 you examine his aswell as ther ecrds and come up with he folowing sepen 20 pace of re cost per yur 1200 per ye S20 per ender thes ay res but go elsewhere, you decide ona serve ‘Determine the mer of hamburgers UA 00 temand 100 ox 00 annual demand a the lowest cost The price year onto closely conto each tem stocked, 08 Here is. sample from the inventory reconds Irow Moxy Down Pocerex UN Iris Mwnity Dewaxo Proce rex Ut : ‘m0 0 0 00 2 220 yo 3000 200 2 m0 a 0 4 ‘100 mo 8 0 1000 5 4e00 m0 saxo ‘200 Develop an ABC classification for these 10 items 30 A local service station i open 7 dys per week, 265 days per year. Sales of 10W40 grade pes ‘ium oil average 20 cans per day. Inventory holding oss ae $050 per can per year. Ordering ‘Costs are $10 per order Lead time is two weeks. Backorders are not practcal—the motorist ives away. ‘a Based on these data, choose the appropriate inventory model and calculate the economic ‘rier quantity and reoeder point. Describe in sentence how the plan woukd work. Hint: “Assume demand is determinisi BO 10 BE, RRERSREEERP? BF &