TIPIC 6.78. Teks is a multiplant textile manufacturing facility. In one of their plants they manufacture the cloth from cotton fibers. The manufacturing process is a weaving process, done in looms. One of the components of the loom is called a comb, as the fibers are directed by its "teeth" to the weaving area. Teks has over 50 looms. As the comb wears out. it needs replacement. Teks keeps stock of combs and manages it using base stock approach. Monthly demand for combs has a normal distribution with N(10.9). Delivery time is con- stant at six weeks. The cost of a comb is $3000, and shortage creates a cost of $7000 per inventory cycle, because of production stoppage. Annual inventory holding cost is estimated to be 20 per- cent, and ordering cost is $200. (a) Find the reorder point for a cycle service level of 95 percent. (b) What is the average number of combs held in inventory? Assume ordering once a week. (c) What is the annual cost of the policy? (Include shortage cost) Suppose that Teks decides to use a policy of rush orders for combs in case of a shortage, to avoid production stoppage. The item will reach the plant within several hours, and a shortage will be avoided. A rush order costs $800 per order. (a) Find the desired inventory level for this case, and the annual cost (b) Would you recommend using this policy? TIPIC 6.78. Teks is a multiplant textile manufacturing facility. In one of their plants they manufacture the cloth from cotton fibers. The manufacturing process is a weaving process, done in looms. One of the components of the loom is called a comb, as the fibers are directed by its "teeth" to the weaving area. Teks has over 50 looms. As the comb wears out. it needs replacement. Teks keeps stock of combs and manages it using base stock approach. Monthly demand for combs has a normal distribution with N(10.9). Delivery time is con- stant at six weeks. The cost of a comb is $3000, and shortage creates a cost of $7000 per inventory cycle, because of production stoppage. Annual inventory holding cost is estimated to be 20 per- cent, and ordering cost is $200. (a) Find the reorder point for a cycle service level of 95 percent. (b) What is the average number of combs held in inventory? Assume ordering once a week. (c) What is the annual cost of the policy? (Include shortage cost) Suppose that Teks decides to use a policy of rush orders for combs in case of a shortage, to avoid production stoppage. The item will reach the plant within several hours, and a shortage will be avoided. A rush order costs $800 per order. (a) Find the desired inventory level for this case, and the annual cost (b) Would you recommend using this policy
