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A grocery store has three open checkout lanes. On average, 45 shoppers arrive at these lanes per hour. The coefficient of variation of the interarrival

A grocery store has three open checkout lanes. On average, 45 shoppers arrive at these lanes per hour. The coefficient of variation of the interarrival time is equal to 1. The average service time for each lane is 18 customers per hour, and the coefficient of variation of service time distribution for each lane is three minutes. If one more checkout lane is added, what is the new utilization of the system?

a.

0.833

b.

0.50

c.

0.25

d.

0.625

A Boston branch of the BabyStuff, a fictional U.S. manufacturer of children's apparel, is striving to improve its inventory management. The store estimates that its weekly sales are 1,600 units. Each order costs a fixed administrative expense of $4,000. Assume that there is no seasonality and the lead time is zero. Holding costs are 10% of average inventory cost per year. On average, each unit of apparel costs the store $5. What is BabyStuff's Boston store's average annual inventory holding cost if it chooses to order 4 times a year?

a.

$2600

b.

$5200

c.

$10400

d.

$16000

A Boston branch of the BabyStuff, a fictional U.S. manufacturer of children's apparel, is striving to improve its inventory management. The store estimates that its weekly sales are 1,600 units. Each order costs a fixed administrative expense of $4,000. Assume that there is no seasonality and the lead time is zero. Holding costs are 10% of average inventory cost per year. On average, each unit of apparel costs the store $5. What is BabyStuff's Boston store's average annual ordering cost if it chooses to order 4 times a year?

a.

$2600

b.

$5200

c.

$10400

d.

$16000

A company has days of inventory equal to 23.6 days. Which of the following best describes the meaning of this number?

a.

It is estimated that the whole inventory can be sold out in 23.6 days.

b.

The company replenishes its inventory every 23.6 days on average.

c.

It takes about 23.6 days for an inventory replenishing order to come through.

d.

An item typically stays 23.6 days in the inventory before getting sold.

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