Reference no: EM132956788

Question 1 

You are the supply chain manager at a wholesale company. You want to improve the inventory for the finished goods. You have identified the infant milk powder as having a lot of dead stock. To analyse this product inventory, you have collected the data as below.

i) Average demand per day = 35 units

ii) Working days per year = 300 days

iii) Ordering cost = RM20 per order

iv) Annual carrying (holding) cost rate = 20% of item cost

v) Cost of infant milk powder per unit = RM105

vi) Lead time = 4 days

vii) Standard deviation of daily demand= 8 units

viii) Customer service level = 90%

a) Based on a continuous review system (Q System), determine the optimal order quantity Q, and reorder point (R).

b) Based on the periodic review system (P System), determine the period review interval (P) and target inventory level (T).

c) Explain how we can use a single bin system and two-bin system in the physical operation to control the inventory of infant milk powders based on the answer from (a) and (b).

Question 2

A post office has a counter for customer drive-through to pay the bill. The design of the drive- through lane allows for unlimited queue length. The arrival and service rate are Poisson distributed with λ= 40 customers per hour arriving on average and μ =50 customers per hour can be served on average.

a. Compute the average number of arrivals.

b. Compute the average time a customer wait.

c. Compute the average number of arrivals in the system.

d. Compute the average time a customer is in the system.

e. Compute the probability that less than or equal to 2 customers are in the system.

f. Due to the covid-19 pandemic, the unlimited queuing length has been modified to limited queuing length to control the number of cars waiting. The queue length has been limited to 4 cars only with λ= 40 and μ =50. Compute (a) and (b).