Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

WalMart has contract with P&G for supplying their detergent product. The daily demand for detergent is constant at 10,800 units. The lead time for detergent

image text in transcribed

image text in transcribed

WalMart has contract with P&G for supplying their "detergent" product. The daily demand for detergent is constant at 10,800 units. The lead time for detergent delivery to stores is normally distributed with a mean of 1 day and a standard deviation of 1 day. Walmart expects a 99% service level to fulfil high customer satisfaction. What is the ROP for detergent? You may use the standard normal table for z-values. The reorder point (ROP) is calculated to be detergents (round your response to the nearest whole number). Blue Mountain coffee company sells gourmet coffee in 50lb bags. They have an ordering cost of $35 per order and the carrying cost is $19 per bag per year. To meet the demand, Blue Mountain places orders in large quantities 7 times a year. The stockout cost is estimated to be $10 per bag. Over the past several years, they have observed the following demand during the lead time for their coffee: Demand During Lead Time (Bags) 40 50 60 70 80 90 Probability 0.1 0.2 0.2 0.2 0.2 0.1 The reorder point is 60 bags without safety stock. What level of safety stock should be maintained? The optimal quantity of safety stock which minimizes the expected total cost is = bags (enter your response as a whole number)

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

The Internet Supply Chain Impact On Accounting And Logistics

Authors: D. Chorafas

5th Edition

0333949633, 9780333949634

More Books

Students also viewed these Accounting questions

Question

Define success.

Answered: 1 week ago