Question
Elyssas Elegant Eveningwear (EEE) needs to ship finished goods from its manufacturing facility to its distribution warehouse. The daily demand from the distribution warehouse is
Elyssas Elegant Eveningwear (EEE) needs to ship finished goods from its manufacturing facility to its distribution warehouse. The daily demand from the distribution warehouse is normally distributed with mean 900 gowns, and standard deviation 140 gowns. It costs the distribution warehouse $0.3 for holding one gown for one day.
EEE set the critical ratio at 90%.
EEE uses a premium parcel service for the gown delivery. The lead time L = 5 days. The effective lead time L+1 = 6 days. Each shipment is charged a fixed $200 cost.
Please use the information given to answer the Q.
1.) What would the reorder point r be? (Round your answer to the nearest INTEGER)
1b.) EEE should use the quantity = units as a the order batch size. (Round your answer to the nearest INTEGER)
1c.) At the beginning of a day, there are 2800 units of inventory held on hand in the warehouse, and a total of 2190 unit in transit. How many inventory should be ordered?
Put 0 if you think no inventory should be ordered.
(Remember this is a (r,Q) problem, not an order-up-to problem)
1d.) If EEE raises the critical ratio from 90% to 95%, how much MORE safety stock should be held?
Report the ADDITIONAL amount of safety stock.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started