The manager of a local retail store is ordering a specialty item from a supplier in Toronto. The lead time is constant at five days. The store is open 300 days a year (50 weeks Monday-Saturday, with a two-week vacation). The average daily demand is 40 units, with a standard deviation of 7.6. (Assume that the distribution is approximately normal.) It costs $40 to place an order, and the annual holding cost is 30% of the inventory value. The supplier charges $8.00 per unit.

Find the economic order quantity (EOQ).

a.

346

b.

1788

c.

632

d.

36

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The manager of a local retail store is ordering a specialty item from a supplier in Toronto. The lead time is constant at five days. The store is open 300 days a year (50 weeks Monday-Saturday, with a two-week vacation). The average daily demand is 40 units, with a standard deviation of 7.6. (Assume that the distribution is approximately normal.) It costs $40 to place an order, and the annual holding cost is 30% of the inventory value. The supplier charges $8.00 per unit.

What are the expected value and standard deviation of demand during lead time?

a.

40, 7.6

b.

40 , 16.99

c.

200 , 16.99

d.

200, 7.6

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The manager of a local retail store is ordering a specialty item from a supplier in Toronto. The lead time is constant at five days. The store is open 300 days a year (50 weeks Monday-Saturday, with a two-week vacation). The average daily demand is 40 units, with a standard deviation of 7.6. (Assume that the distribution is approximately normal.) It costs $40 to place an order, and the annual holding cost is 30% of the inventory value. The supplier charges $8.00 per unit.

Assume that the retailer wants to set the cycle service level at 85%. what is the required safety stock level?

a.

16.99

b.

17.67

c.

40

d.

200

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The manager of a local retail store is ordering a specialty item from a supplier in Toronto. The lead time is constant at five days. The store is open 300 days a year (50 weeks Monday-Saturday, with a two-week vacation). The average daily demand is 40 units, with a standard deviation of 7.6. (Assume that the distribution is approximately normal.) It costs $40 to place an order, and the annual holding cost is 30% of the inventory value. The supplier charges $8.00 per unit.

Assume that the retailer wants to set the cycle service level at 85%. Find the reorder point for a continuous review system.

a.

18

b.

240

c.

200

d.

218

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The manager of a local retail store is ordering a specialty item from a supplier in Toronto. The lead time is constant at five days. The store is open 300 days a year (50 weeks Monday-Saturday, with a two-week vacation). The average daily demand is 40 units, with a standard deviation of 7.6. (Assume that the distribution is approximately normal.) It costs $40 to place an order, and the annual holding cost is 30% of the inventory value. The supplier charges $8.00 per unit.

Assume that the order quantity is 700 per order. what is the ordering cost?

a.

740

b.

685

c.

215

d.

28000

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The manager of a local retail store is ordering a specialty item from a supplier in Toronto. The lead time is constant at five days. The store is open 300 days a year (50 weeks Monday-Saturday, with a two-week vacation). The average daily demand is 40 units, with a standard deviation of 7.6. (Assume that the distribution is approximately normal.) It costs $40 to place an order, and the annual holding cost is 30% of the inventory value. The supplier charges $8.00 per unit.

Assume that the order quantity is 700 per order. what is the annual holding cost?

a.

840

b.

1680

c.

2800

d.

28800

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The manager of a local retail store is ordering a specialty item from a supplier in Toronto. The lead time is constant at five days. The store is open 300 days a year (50 weeks Monday-Saturday, with a two-week vacation). The average daily demand is 40 units, with a standard deviation of 7.6. (Assume that the distribution is approximately normal.) It costs $40 to place an order, and the annual holding cost is 30% of the inventory value. The supplier charges $8.00 per unit.

Find the annual cost of this system, identifying and including all relevant components as well as the cost of goods.

a.

96,802 $

b.

97,517 $

c.

96,000 $

d.

97,561 $

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The manager of a local retail store is ordering a specialty item from a supplier in Toronto. The lead time is constant at five days. The store is open 300 days a year (50 weeks Monday-Saturday, with a two-week vacation). The average daily demand is 40 units, with a standard deviation of 7.6. (Assume that the distribution is approximately normal.) It costs $40 to place an order, and the annual holding cost is 30% of the inventory value. The supplier charges $8.00 per unit.

Recently the lead times exhibited some variation, which requires a rethinking of the ordering policy. Assume that the current lead times can be approximated by a normal distribution with a mean of six days and a standard deviation of 1.2 days. Find the amount of safety stock under these changed circumstances (cycle service level 85%).

a.

51.48

b.

294

c.

240

d.

53.54

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The manager of a local retail store is ordering a specialty item from a supplier in Toronto. The lead time is constant at five days. The store is open 300 days a year (50 weeks Monday-Saturday, with a two-week vacation). The average daily demand is 40 units, with a standard deviation of 7.6. (Assume that the distribution is approximately normal.) It costs $40 to place an order, and the annual holding cost is 30% of the inventory value. The supplier charges $8.00 per unit.

Recently the lead times exhibited some variation, which requires a rethinking of the ordering policy. Assume that the current lead times can be approximated by a normal distribution with a mean of six days and a standard deviation of 1.2 days. Find the amount of reorder point under these changed circumstances.

a.

51.48

b.

240

c.

294

d.

53.54