Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Stecyk Shoe Co produces and sells an excellent quality walking shoe. After production, the shoes are distributed to 20 warehouses around the country. Each warehouse

image text in transcribed
image text in transcribed
Stecyk Shoe Co produces and sells an excellent quality walking shoe. After production, the shoes are distributed to 20 warehouses around the country. Each warehouse services approximately 100 stores in its region. Stecyk uses an EOQ model to determine the number of pairs of shoes to order for each warehouse from the factory, Arral demand for Warehouse OR2 is approximately 162,000 pairs of shoes. The ordering cost is $324 per order. The annual carrying cost of a pair of shoes is $2.50 per pair Read the requires als Requirement 1. Use the EOQ model to determine the optimal number of pairs of shoes per order Bogin by selecting the formula uned to calculate EOQ (DDemand in units for one year, Pr Ordering cont per purchase order, CCarrying cost of one unit in stock 58 an Quy order quantity RSS mais $ amenta old Co urts at per un Ock to your web and then clickCheck Awe ng CC Am remont 1. Us pf one unit in stock by selecting the any order quantity 1. Use the EOQ model to determine the optimal number of pairs of shoes per order. 2. Assume each month consists of approximately 4 weeks. If it takes 1 week to receive an order, at what point should warehouse OR2 reorder shoes? 3. Although OR2's average weekly demand is 3,375 pairs of shoes (162,000 + 12 months 4 weeks), demand each week may vary with the following probability distribution: Total demand for 1 week 2,300 pairs 1,860 pairs 3,375 pairs 3,625 pairs 3,845 pairs Probability (suma to 1.00) 0.03 0.74 0.10 0.03 Wa store wants shoes and OR2 han none in stock, OR2 can "rush" them to the store at an additional cost of $3 per pak. How much safety stock should Warehouse OR2 hold? How will this affect the reorder point and reorder quantity? 0,10 Print Done

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

Alaskas Permanent Fund Dividend Examining Its Suitability As A Model

Authors: K. Widerquist, M. Howard

2nd Edition

0230112072, 9780230112070

More Books

Students also viewed these Accounting questions