Determine the reorder point and safety stock

Assignment Help Project Management

Reference no: EM131177619

The daily demand for an item is distributed normally, with a mean of 5 and a variance of 2. The cost to place an order is $10, and the carrying charge per day is estimated at 10 percent of the inventory value. The supplier has offered the following purchase plan:

2028_Purchase plan.png

a. Recommend an optimal order quantity that will minimize the total inventory costs of ordering and holding plus the purchase cost of the units. Although it is not necessary, you may assume 360 days a year.

b. Determine the reorder point and safety stock that will achieve a 95 percent service level given a constant 2-day delivery lead time. Assume daily demand is an independent variable.

Reference no: EM131177619

Questions Cloud

Create a spreadsheet to model a home loan : at a personal level, we could create a spreadsheet to model a home loan and see the impact on repayments of changing parameters like interest rates, principal size and the term of the loan

Statement in relation to project management : They are, effectively, "feeling each other out" and finding their way around how they might work together. Discuss this statement in relation to project management. 1000 words

Describe the ethical issues related to cultural competence : Examine the influence of your own personal values as related to the diversity issues presented in this case. Reflect on how you felt as you read the case study, how your values came into play, and how you would handle your values in a situation su..

Discuss this statement in relation to project management : They are not yet working on the project. They are, effectively, "feeling each other out" and finding their way around how they might work together. Discuss this statement in relation to project management. 1000 words

Determine the reorder point and safety stock : Determine the reorder point and safety stock that will achieve a 95 percent service level given a constant 2-day delivery lead time.

Find two different solutions of the puzzle : Find all allowable states of the puzzle, where neither the wolf and the goat nor the goat and the cabbage are left on the same shore without the farmer.

How the movie compare to our wall street big bankers today : A movie you will never forget-a true "classic"--managerial economics ethical or not/ including banking- a historical perspective. This film is all based on fact. It happened like you see it. How does this compare to our Wall Street big bankers tod..

Will the buyer succeed in recovering the excess : The buyer didn't commence action to recover the excess payment until some nine months after delivery. Will the buyer succeed in recovering the excess?

Determine whether directed graph shown has an euler circuit : Determine whether the directed graph shown has an Euler circuit. Construct an Euler circuit if one exists. If no Euler circuit exists, determine whether the directed graph has an Euler path. Construct an Euler path if one exists.

User Account

All Pages