Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Mr. Fantastic's garage purchases mufflers for his cars using a periodic review system. His annual demand is 3000 mufflers, standard deviation of daily demand

image

Mr. Fantastic's garage purchases mufflers for his cars using a periodic review system. His annual demand is 3000 mufflers, standard deviation of daily demand is 6 mufflers, and one muffler costs $25 to purchase. His inventory carrying cost for mufflers is very high at 35% of the muffler's value. Mr. Fantastic reviews his inventory every 15 days, and it takes 2 more days for him to receive his items after ordering them. It costs $100 per every order he sends out. He wants to maintain a service level of 75% and if he typically keeps the garage open for 250 days, what optimal inventory level would you recommend Mr. Fantastic for his upcoming order? (Assume that there is 25 on order items, 5 on hand items, and zero back orders right now) 191 215 276 164

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

Operations And Supply Chain Management

Authors: F. Robert Jacobs, Richard Chase

14th Edition

978-0077824921, 78024021, 9780077823344, 007782492X, 77823346, 978-0078024023

More Books

Students also viewed these General Management questions

Question

Would I be a more effective student if I spent less time online?

Answered: 1 week ago

Question

Draw a four Vs profile for the companys products / services. Plo8

Answered: 1 week ago

Question

What is the process hierarchy? Plo8

Answered: 1 week ago