/*! This file is auto-generated */ .wp-block-button__link{color:#fff;background-color:#32373c;border-radius:9999px;box-shadow:none;text-decoration:none;padding:calc(.667em + 2px) calc(1.333em + 2px);font-size:1.125em}.wp-block-file__button{background:#32373c;color:#fff;text-decoration:none} Q. 4OQ The local supermarket buys lettu... [FREE SOLUTION] | 91影视

91影视

Log out

Learning Materials

Features

Discover

Chapter 4: Q. 4OQ (page 544)

The local supermarket buys lettuce each day to ensure really fresh produce. Each morning any lettuce that is left from the previous day is sold to a dealer that resells it to farmers who use it to feed their animals. This week the supermarket can buy fresh lettuce for \(4.00 a box. The lettuce is sold for \)10.00 a box and the dealer that sells old lettuce is willing to pay $1.50 a box. Past history says that tomorrow鈥檚 demand for lettuce averages 250 boxes with a standard deviation of 34 boxes. How many boxes of lettuce should the supermarket purchase tomorrow?

Short Answer

Expert verified

Anything resembles a supermarket, particularly in terms of the range or quantity of its goods or services

Step by step solution

01

Given

Cost of box =$ 4

Selling price of per box = $ 10

Selling price of old product = $ 1.50

Average demand = 250 boxes

Standard deviation = 34 boxes

02

Service Level

Excess cost per boxCe=Cost of the per box-Selling price of old boxesCe=$4-$1.50Ce=$2.50

Shortage cost per boxCs=Selling price of the per box-cost price of boxesCs=$10-$4Cs=$6

Service level =CSCS-Ce=66 + 2.5= 0.70589

03

Find the Z score using the = NORMSINV() function in the excel spreadsheet

Calculation of Optimal stock level:-

Optimal Stocking levelSo=惭别补苍+锄蟽So=250+0.541417脳34So=268.4 or 268 approx

As a result, the supermarket should buy 268 boxes oflettuce tomorrow.

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Over 30 million students worldwide already upgrade their learning with 91影视!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

Is it true that, for an ERP system to be effective, it must be completely purchased from a single vendor?

Distinguish between dependent and independent demand in a McDonald鈥檚 restaurant, in an integrated manufacturer of personal copiers, and a pharmaceutical supply house.

Assume that you are using exponential smoothing with an adjustment for trend. Demand is increasing at a very steady rate of about five units per week. Would you expect your alpha and delta parameters to be closer to one or zero?

Palin鈥檚 Muffler Shop has one standard muffler that fits a large variety of cars. The shop wishes to establish a periodic review system to manage the inventory of this standard muffler. Use the information in the following table to determine the optimal inventory target level (or order-up-to level).

Annual demand

3,000 mufflers

Ordering cost

\(50 per order

The standard deviation of daily demand

6 mufflers per working day

Service probability

90%

Item cost

\)30 per muffler

Lead time

2 working days

Annual holding cost

25% of the item value

Working days

300 per year

Review period

15 working days

a. What is the optimal target level (order-up-to level)?

b. If the service probability requirement is 95 percent, the optimal target level [your answer in part (a)] will (select one):

I. Increase.

II. Decrease.

III. Stay the same.

Jill鈥檚 Job Shop buys two parts (Tegdiws and Widgets) for use in its production system from two different suppliers. The parts are needed throughout the entire 52-week year. Tegdiws are used at a relatively constant rate and are ordered whenever the remaining quantity drops to the reorder level. Widgets are ordered from a supplier who stops by every three weeks. Data for both products are as follows:

Item

Tegdiws

Widgets

Annual demand

10,000

5,000

Holding cost (% of item cost)

20%

20%

Setup or order cost

\( 150.00

\) 25.00

Lead time

4 weeks

1 week

Safety stock

55 units

5 units

Item cost

\( 10.00

\) 2.00

Annual demand Holding cost (% of item cost) Setup or order cost

a. What is the inventory control system for Tegdiws? That is, what is the reorder quantity and what is the reorder point?

b. What is the inventory control system for Widgets?
See all solutions

Recommended explanations on Business Studies Textbooks

Strategy

Read Explanation

Influences On Business

Read Explanation

Financial Performance

Read Explanation

Insurance

Read Explanation

Business Development

Read Explanation

Change Management

Read Explanation
View all explanations

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.