Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Royafrech's South Jersey warehouse faces a dally demand that is normally distributed, with mean 1,000 and standard deviation 100 pallets. RoyalTech's supplier has a lead-time

image text in transcribed
Royafrech's South Jersey warehouse faces a dally demand that is normally distributed, with mean 1,000 and standard deviation 100 pallets. RoyalTech's supplier has a lead-time that is normally distributed, with mean 5 days and standard devintion 1 day. RoyalTech reviews its imventory periodically, that is, every 7 days. (Hint: think about the inventory model appropriate here) RovalTech's warehouse runs 365 days a year, and the cost of carrying inventory is 18.25% per year. The supplier charges Rovaltech $2,000 per pallet, and $5,000 per delivery. Rovaltech plans to maintain 98$SL. NORMSINV(0.98) =2.054.(2.054)=0.0073. Answer the following questions. 1. How much safety stock should RovalTech carry? pallets. 2. What is RoyalTech's average inventory? pallets. 3. What is the total relevant cost incurred by RoyalTech per day? $ 4. What is the Fil Rate that RoyalTech is able to achieve for this service level

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

Service Management Operations, Strategy, Information Technology

Authors: James A Fitzsimmons, Mona J Fitzsimmons

6th Edition

0077228499, 9780077228491

More Books

Students also viewed these General Management questions