How many days of supply are on hand on average

Assignment Help Operation Management

Reference no: EM131233537

Demand for walnut fudge ice cream at the Sweet Cream Dairy can be approximated by a Normal distribution with a mean of 7 gallons per day and a standard deviation of 0.7 gallons per day. set up cost $10 per order.holding cost 1$ per gallen per day.The new manager desires a service level of 90 percent. Lead time is two days, and the dairy is open seven days a week. Answer the following questions assuming the dairy is operated using a continuous review policy first and then a periodic review policy.

(a) Under a continuous review policy, what reorder point would be consistent with the desired service level?

(b) What is the dairy manager’s optimum order quantity?

PERIODIC REVIEW POLICY:

(d) If a periodic review policy is used instead of a continuous review system and inventory is reviewed every 3 days, what is the base stock level?

(e) What is the order size that would be needed under the periodic system if the store currently holds 15 gallons in inventory?

(f) What is the order size in part (e) if the store holds 20 gallons in inventory?

Reference no: EM131233537

Questions Cloud

Forecasting is defined as to take decision for future : Forecasting is defined as to take decision for future on the basis of current and past conditions. To take important organizational decisions, we need to analyze the available information and data. Taking decision without analyzing the data and infor..

Appropriate numbering system to identify tasks and sub-tasks : Create a task oriented, tabular WBS for the same project covered in task 1 above. Make it three levels deep, where the top level is the overall project, the next level down is the task level, and the third level down is the sub-task level. Be sure to..

Linear programming model to abstract your decision problem : Suppose you have $800K to invest in a mix of stock and bonds and you do not like your basket to contain more than 60% stocks. Historically you know the average annual return for the stock and bond are 16% and 5% respectively. Formulate a linear progr..

Kept the economic power relationships in balance : A key critique of the ethical theory of Mill and the corresponding economic model of Adam Smith is that: One definition of vocation is: Which of these is not one of the landmark pieces of legislation that kept the economic power relationships in bala..

How many days of supply are on hand on average : Demand for walnut fudge ice cream at the Sweet Cream Dairy can be approximated by a Normal distribution with a mean of 7 gallons per day and a standard deviation of 0.7 gallons per day. What is the dairy manager’s optimum order quantity? How many da..

Does the price behave as you expect after each of patterns : Find the given patterns in this chart. Does the price behave as you would expect after each of these patterns? Explain.

Default option when giving presentations : Powerpoint seems to be the default option when giving presentations. Weblinks has instructions on viewing a video which details the most common problems. What about your experiences with ppt presentations- either using or viewing them. How would you ..

Compute the incremental income after taxes : What is the economic ordering quantity? How many orders will be placed during the year? What will the average inventory be? Compute the incremental income after taxes.

Identify and discuss company investing activities : ACCT5021 Accounting for Managers Assessment Task Report. Identify and discuss each company's investing and financing activities during the 2013 - 2015 financial years. In particular, explain what might be the impact of the current global and domest..

User Account

All Pages