Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Troy's Tires sells a certain brand tire which has a daily demand that is normally distributed, with a mean of 15 tires and a standard

image text in transcribed
Troy's Tires sells a certain brand tire which has a daily demand that is normally distributed, with a mean of 15 tires and a standard deviation of 4 tires. (In your model use integers for all demands.) Troy's Tires replenishes its inventory by ordering 350 tires from the factory whenever its current inventory reaches 50 tires. The lead time (in days) to receive an order from the factory follows the distribution shown in the following table: Lead Time Probability 0.10 2 0.22 0.28 0.15 5 0.15 6 0.10 The cost to hold 1 tire in inventory for one day is $0.25. The cost to place an order with the factory is $80. Stockout costs are estimated at $11 per tire. The initial inventory level is 90 tires. a. Simulate 6 months (180 days) of operation to calculate the total semiannual cost and the percentage of stockouts for the period. Replicate these calculations 350 times each to calculate the average values for these measures. b. Troy's Tires would like to evaluate the economics of ordering 150, 200, 250, 300, and 350 tires, with a reorder point of 50 tires. Based on the average total semiannual cost, which order quantity would you recommend

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

Advanced Engineering Mathematics

Authors: ERWIN KREYSZIG

9th Edition

0471488852, 978-0471488859

More Books

Students also viewed these Mathematics questions