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Chapter 12, problem 23

A company uses 85 circuit boards a day in a manufacturing process. The person who orders the boards follow this rule: Order when the amount on hand drops to 625 boards. Orders are delivered approximately six days after being placed. The delivery time is normal with a mean of six days and a standard deviation of 1.10 days.

What is the right inventory model for this problem?

Single period model

EOQ model

Fixed interval model

ROP model

Chapter 12, problem 23

What is the service level the current policy provides? (Please keep 4 digits after the decimal point.)

Chapter 12, problem 23

What is the probability that the supply of circuit boards will beexhausted before the order is received if boards are reordered when the amount on hand drops to625 boards? (Please keep 4 digits after the decimal point.)

Chapter 12, problem 24.

One item a computer store sells is supplied by a vendor who handles only that item. Demand for that item recently changed, and the store manager must determine when to replenish it. The manager wants a probability of at least 96 percent of not having a stockout during lead time. The manager expects demand to average a dozen units a day and have a standard deviation of two units a day. Lead time is variable, averaging four days with a standard deviation of one day.

What is the proper Z value corresponds to this stockout requirement?

Chapter 12, problem 24.

One item a computer store sells is supplied by a vendor who handles only that item. Demand for that item recently changed, and the store manager must determine when to replenish it. The manager wants a probability of at least 96 percent of not having a stockout during lead time. The manager expects demand to average a dozen units a day and have a standard deviation of two units a day. Lead time is variable, averaging four days with a standard deviation of one day.

What is the right formula to calculate safety stock in this problem?

Chapter 12, problem 24.

One item a computer store sells is supplied by a vendor who handles only that item. Demand for that item recently changed, and the store manager must determine when to replenish it. The manager wants a probability of at least 96 percent of not having a stockout during lead time. The manager expects demand to average a dozen units a day and have a standard deviation of two units a day. Lead time is variable, averaging four days with a standard deviation of one day.

What is the corresponding safety stock level to achieve this stockout rate?

Chapter 12, problem 24.

One item a computer store sells is supplied by a vendor who handles only that item. Demand for that item recently changed, and the store manager must determine when to replenish it. The manager wants a probability of at least 96 percent of not having a stockout during lead time. The manager expects demand to average a dozen units a day and have a standard deviation of two units a day. Lead time is variable, averaging four days with a standard deviation of one day.

What is the ROP that satisfies this stockout rate requirement? (Hint: In this case, ROP should be an integer.)

Chapter 12, problem 26.

A small copy center uses five 500-sheet boxes of copy paper a week. Experience suggests that usage can be well approximated by a normal distribution with a mean of five boxes per week and a standard deviation of one-half box per week. Two weeks are required to fill an order for letterhead stationery.

If the copy center reorders when the supply on hand is 10 boxes, what is the risk of a stockout?

Chapter 12, problem 26.

A small copy center uses five 500-sheet boxes of copy paper a week. Experience suggests that usage can be well approximated by a normal distribution with a mean of five boxes per week and a standard deviation of one-half box per week. Two weeks are required to fill an order for letterhead stationery.

If the copy center reorders when the supply on hand is 12 boxes, what is the risk of a stockout? (Please keep 4 digits after the decimal point.)

Chapter 12, problem 26.

A small copy center uses five 500-sheet boxes of copy paper a week. Experience suggests that usage can be well approximated by a normal distribution with a mean of five boxes per week and a standard deviation of one-half box per week. Two weeks are required to fill an order for letterhead stationery.

If the copy center wants to have a stockout rate that is no more than 1%, what should be the reorder point?

Chapter 12, problem 26.

A small copy center uses five 500-sheet boxes of copy paper a week. Experience suggests that usage can be well approximated by a normal distribution with a mean of five boxes per week and a standard deviation of one-half box per week. Two weeks are required to fill an order for letterhead stationery.

If a fixed interval of seven weeks instead of an ROP is used for reordering, what risk does the copy center incur that it will run out of stationery before this order arrives if it orders 36 boxes when the amount on hand is 12 boxes? (Please keep 4 digits after the decimal point.)

Chapter 12, problem 26.

A small copy center uses five 500-sheet boxes of copy paper a week. Experience suggests that usage can be well approximated by a normal distribution with a mean of five boxes per week and a standard deviation of one-half box per week. Two weeks are required to fill an order for letterhead stationery.

To reduce the inventory cost, the company decides to shorten the FOI review cycle from 7 weeks to 4 weeks. What will be the order quantity if the on hand inventory is 12 box at the review time if we maintain the service level as the same?

Chapter 12, problem 26.

A small copy center uses five 500-sheet boxes of copy paper a week. Experience suggests that usage can be well approximated by a normal distribution with a mean of five boxes per week and a standard deviation of one-half box per week. Two weeks are required to fill an order for letterhead stationery.

To reduce the inventory cost, the company decides to shorten the FOI review cycle from 7 weeks to 4 weeks. What percentage of inventory holding cost can be saved if it maintains the same service level?

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