62 63 Question 4 A butcher shop sells premium meats directly to customers. The butcher shop buys lamb from an Australian supplier for $6.7 per pound and sells the lamb at $13.1 per pound. The store promises fresh lamb and so will sell the remaining unsold lamb at the end of every day in bulk for $3.1 per pound to a local supermarkets. The demand for lamb at this store is normally distributed with an average of 53 pounds a a standard deviation of 4.2 pounds. 64 65 66 67 68 69 70 71 72 73 74 75 76 Question Calculate the shortage cost. Points 4 Answer dollars Question Calculate the excess cost. Points 4 Answer dollars 77 78 79 80 Question Calculate the optimal service. Points 3 Answer % 81 82 Question Find the optimal amount of lamb this butcher should order. Points 3 Answer pounds 83 84 85 86 Question What is the stockout risk based on the optimal service level? Points 3 Answer % 87 88 89 90 91 Question 5 Demand for hand sanitizer at a local pharmacy can be approximated by a normal distribution with a mean of 17 liters per day and a standard deviation of 2.9 liters per day. The new manager desires a service level of 90%. Lead time is 4 days. 92 93 94 95 96 97 Question What value of z is appropriate for this situation? Points 3 Answer Question How much safety stock should be held to achieve the required service level? Points 3 Answer liters Question What is the Reorder Point (ROP) that achieves the required service level? Points 6 Answer liters 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 Question Calculate the stockout risk. Points 6 Answer % Question Calculate the expected lead time demand. (expected demand during lead time) Points 6 Answer liters 62 63 Question 4 A butcher shop sells premium meats directly to customers. The butcher shop buys lamb from an Australian supplier for $6.7 per pound and sells the lamb at $13.1 per pound. The store promises fresh lamb and so will sell the remaining unsold lamb at the end of every day in bulk for $3.1 per pound to a local supermarkets. The demand for lamb at this store is normally distributed with an average of 53 pounds a a standard deviation of 4.2 pounds. 64 65 66 67 68 69 70 71 72 73 74 75 76 Question Calculate the shortage cost. Points 4 Answer dollars Question Calculate the excess cost. Points 4 Answer dollars 77 78 79 80 Question Calculate the optimal service. Points 3 Answer % 81 82 Question Find the optimal amount of lamb this butcher should order. Points 3 Answer pounds 83 84 85 86 Question What is the stockout risk based on the optimal service level? Points 3 Answer % 87 88 89 90 91 Question 5 Demand for hand sanitizer at a local pharmacy can be approximated by a normal distribution with a mean of 17 liters per day and a standard deviation of 2.9 liters per day. The new manager desires a service level of 90%. Lead time is 4 days. 92 93 94 95 96 97 Question What value of z is appropriate for this situation? Points 3 Answer Question How much safety stock should be held to achieve the required service level? Points 3 Answer liters Question What is the Reorder Point (ROP) that achieves the required service level? Points 6 Answer liters 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 Question Calculate the stockout risk. Points 6 Answer % Question Calculate the expected lead time demand. (expected demand during lead time) Points 6 Answer liters