Determine what the weekly holding cost

Assignment Help Operation Management

Reference no: EM131361260

Repeat the simulation in, assuming that the reorder point is 4 units rather than 2. Compare the costs for these two situations. Use the same random numbers as in Problem.

Problem -

Dumoor Appliance Center sells and services several brands of major appliances. Past sales for a particular model of refrigerator have resulted in the following probability distribution for demand:

Demand Per Week	0	1	2	3	4
Probability	0.20	0.40	0.20	0.15	0.05

The lead-time in weeks is described by the following distribution:

Lead Time (weeks)	1	2	3
Probability	0.15	0.35	0.50

Based on cost considerations as well as storage space, the company has decided to order 10 of these each time an order is placed. The holding cost is $1 per week for each unit that is left in inventory at the end of the week. The stock out cost has been set at $40 per stock out. The company has decided to place an order whenever there are only two refrigerators left at the end of the week. Simulate 10 weeks of operation for Dumoor Appliance, assuming that there are currently 5 units in inventory. Determine what the weekly stock out cost and weekly holding cost would be for the problem. Use the random numbers in the first column of Table F.4 for demand and the second column for lead time.

239_Table F.4.png

Reference no: EM131361260

Questions Cloud

How do case managers find and select resources : How important is it to network and collaborate with other providers? How do case managers engage in collaboration with other providers to help clients receive services? How do case managers find and select resources?

Estimate the net rate of heat loss from your body : Suppose that your body temperature is 300 K and that of your environment is 273 K (freezing point). Your body's emissivity is 1 and its srface area is 2 m2.

What is portfolio beta : Adrien has a portfolio with three stocks. He owns 100 shares of stock A, which is currently priced at $44.00 per share, 155 shares of stock B, which currently sells for $56.00 per share, and 164 shares of stock C, which has a current price of $77.00 ..

What are the temperatures of the three foils : If three identical foils separate regions held at 100 K and 300 K, what are the temperatures of the three foils?

Determine what the weekly holding cost : Dumoor Appliance Center sells and services several brands of major appliances. Past sales for a particular model of refrigerator have resulted in the following probability distribution for demand: Determine what the weekly stock out cost and weekly..

Probability of selecting a score : For a normal distribution with m = 100 and σ = 5, what is the probability of selecting a score between X = 90 and X = 110? In symbols, what is p(110 X 90)?

Mean and standard deviation for the population of z-scores : A population with m = 85 and σ= 12 is transformed into z-scores. After the transformation, what are the values for the mean and standard deviation for the population of z-scores?

What are the dependent and independent variables : What research methods were used, and why were those methods used? (For example, was it an ethnographic study, participation observation, or an in-depth interview? Did it use an experiment, was it a field study, or did it rely on a survey? Was it a..

Why is it important to conduct a swot analysis : BUS 485- Why is it important to conduct a SWOT analysis? What are the weaknesses of a SWOT analysis? Why is that so? Why is sustainable competitive advantage a critical strategy-making consideration?

User Account

All Pages