Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please answer question fast 5. A distributor stocks electronic parts in a warehouse for shipment to various contract manufacturers. One specialized power supply costs $100

image text in transcribedplease answer question fast

5. A distributor stocks electronic parts in a warehouse for shipment to various contract manufacturers. One specialized power supply costs $100 per unit and can only be purchased from the supplier in boxes of 24 with a lead time of 2 weeks. The distributor sells an average of 10 units per week with a standard deviation of 3 units. Because of the risk of obsolescence, the distributor uses an annual holding cost rate of 25 percent. a. If we use a continuous review ROP model and set the backorder cost to b = $25 per year, what reorder point would the approximate model in this chapter set? b. If the order quantity, OQ, were equal to 1. what service level (fill rate) would result from the reorder point of part (a)? c. Because the order quantity is forced by the supplier to be 24, will the actual service level be higher or lower than that in part (b)? How might the distributor select an appropriate reorder point that considers the order quantity of 24? 5. A distributor stocks electronic parts in a warehouse for shipment to various contract manufacturers. One specialized power supply costs $100 per unit and can only be purchased from the supplier in boxes of 24 with a lead time of 2 weeks. The distributor sells an average of 10 units per week with a standard deviation of 3 units. Because of the risk of obsolescence, the distributor uses an annual holding cost rate of 25 percent. a. If we use a continuous review ROP model and set the backorder cost to b = $25 per year, what reorder point would the approximate model in this chapter set? b. If the order quantity, OQ, were equal to 1. what service level (fill rate) would result from the reorder point of part (a)? c. Because the order quantity is forced by the supplier to be 24, will the actual service level be higher or lower than that in part (b)? How might the distributor select an appropriate reorder point that considers the order quantity of 24

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

Sound Investing, Chapter 24 - The Auditors??? Opinion

Authors: Kate Mooney

2nd Edition

0071719466, 9780071719469

More Books

Students also viewed these Accounting questions