Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

2. Jane's ower shop needs 187.5 clay pots a week. Annual holding cost is $0.60 per pot per year. Ordering cost is $20 per order.

image text in transcribed
2. Jane's ower shop needs 187.5 clay pots a week. Annual holding cost is $0.60 per pot per year. Ordering cost is $20 per order. The store operates 48 weeks per year. a. {5 pts) How many pots should the shop order? b. (3 pts) How many times per year should the store place an order? c. (2 pts) How many operating weeks will elapse between two consecutive orders? d. {3 pts) Calculate the total annual cost of placing orders and holding inventory. e. (7 pts) It takes 3 weeks to receive the clay pots after placing an order. The weekly demand is normally distributed with mean 187.5 and standard deviation 30. Calculate the reorder point to reach the service level of 90% during the lead time. f. {2 pts) The demand distribution is the same as in part e. Suppose that the lead time is 2 weeks. If the store wishes to carry no safety stock, what should the reorder point be

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Strategic Management Concepts And Cases Competitiveness And Globalization

Authors: Michael A. Hitt, R. Duane Ireland, Robert E. Hoskisson

13th Edition

0357033833, 978-0357033838

More Books

Students also viewed these General Management questions