/*! 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} Q28OQ After graduation, you decide to ... [FREE SOLUTION] | 91影视

91影视

After graduation, you decide to go into a partnership in an office supply store that has existed for some years. Walking through the store and stockrooms, you find a great discrepancy in service levels. Some spaces and bins for items are empty; others have supplies that are covered with dust and have been there a long time. You decide to take on the project of establishing consistent levels of inventory to meet customer demands. Most of your supplies are purchased from just a few distributors that call on your store once every two weeks. You choose, as your first item for study, computer printer paper. You examine the sales records and purchase orders and find that demand for the past 12 months was 5,000boxes. Using your calculator you sample some days鈥 demands and estimate that the standard deviation of daily demand is 10 boxes. You also search out these figures:

Cost per box of paper: $11.

Desired service probability: 98 percent.

The store is open every day.

Salesperson visits every two weeks.

Delivery time following visit is three days.

Using your procedure, how many boxes of paper would be ordered if, on the day the salesperson calls, 60 boxes are on hand?

Short Answer

Expert verified

Answer

The standard deviation of a product's daily demand is an essential component in inventory control. Assume a pharmacy wishes to calculate the standard deviation of daily demand for a specific antibiotic. The daily demand for this antibiotic is reported to have a somewhat normal distribution.

Step by step solution

01

Standard deviation of daily demand

When I initially taught inventory planning, the arithmetic for calculatingsafety stocks was rather straightforward.I would add a percentage or some days to the cycle stock (anticipated demand during lead time) (or more likely weeks). If the lead time was two weeks, I may carry three or four weeks.

I quickly discovered that demand for some inventory goods is more unpredictable than others and that some suppliers are less dependable than others. I'd rather have too much than too little, and I would never been in trouble for having a bit too much. So, because each item and scenario is unique, I began utilizing statistics to determine the goal inventory level: (average demand * lead time) + (one-sided Z factor * demand standard deviation).

02

Calculation of the number of boxes of paper that would be ordered if, on the day the salesperson calls, 60 boxes are on hand?

Given,

Service level = 98% = 0.98

Order Interval = R = 14 days

Lead Time = L = 3 days

Demand = D = 5000 units/year

Standard Deviation of demand = D= 10 units/day

(R+L) = 14 + 3 = 17 days

Number of 17 day periods in a year

n=36517=21.47cycleswilloccurinayear

DL+R=Dn=500021.47=232.88units

DL+R=D21.47=46.34units

From the standard normal distribution table, we can see that for a service level of 0.98 or 98%, the corresponding z value is z = 2.05

So order up to level

S=DL+R+DL+R=232.88+2.0546.34=327.88or328units

From the given data, the inventory policy is to order (328 - On hand inventory) units = 328 - 60 = 268 boxes

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

Semans is a manufacturer that produces bracket assemblies. Demand for bracket assemblies (X) is 130 units. The following is the BOM in indented form:

ITEMS

DESCRIPTION

USAGE

X

Bracket assembly

1

A

Wall board

4

B

Hanger sub-assembly

2

D

Hanger casting

3

E

Ceramic knob

1

C

Rivet Head screw

3

F

Metal tong

4

G

Plastic cap

2

Below is a table indicating current inventory levels:

ITEMS

X

A

B

C

D

E

F

G

Inventory

25

16

60

20

180

160

1000

100

a.Using Excel, create the MRP using the information provided.

Distinguish between in-process inventory, safety stock inventory, and seasonal inventory.

What are the four main functions within SAP鈥檚 supply chain software?

Historical demand for a product is:

Month

Demand

January

12

February

11

March

15

April

12

May

16

June

15

a. Using a weighted moving average with weights of 0.60, 0.30, and 0.10, find the July forecast.

b. Using a simple three-month moving average, find the July forecast.

c. Using single exponential smoothing witha= 0.2 and a June forecast =13, find the July forecast. Make whatever assumptions you wish.

d. using simple linear regression analysis, calculate the regression equation for the preceding demand data.

e. using the regression equation in d, calculate the forecast for July.

Sales data for two years are as follows. Data are aggregated with two months of sales in each 鈥減eriod.鈥

Months

Sales

闯补苍耻补谤测鈥揊别产谤耻补谤测

109

惭补谤肠丑鈥揂辫谤颈濒

104

惭补测鈥揓耻苍别

150

闯耻濒测鈥揂耻驳耻蝉迟

170

厂别辫迟别尘产别谤鈥揙肠迟辞产别谤

120

狈辞惫别尘产别谤鈥揇别肠别尘产别谤

100

Months

Sales

闯补苍耻补谤测鈥揊别产谤耻补谤测

115

惭补谤肠丑鈥揂辫谤颈濒

112

惭补测鈥揓耻苍别

159

闯耻濒测鈥揂耻驳耻蝉迟

182

厂别辫迟别尘产别谤鈥揙肠迟辞产别谤

126

狈辞惫别尘产别谤鈥揇别肠别尘产别谤

106

a. Plot the data.

b. Fit a simple linear regression model to the sales data.

c. In addition to the regression model, determine multiplicative seasonal index factors. A full cycle is assumed to be a full year.

d. Using the results from parts (b) and (c), prepare a forecast for the next year.

See all solutions

Recommended explanations on Business Studies Textbooks

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.