How many units of safety stock will have to carry

Assignment Help Operation Management

Reference no: EM132172474

Ray's Satellite Emporium wishes to determine the best order size for its best-selling satellite dish.Ray has estimated that weekly demand for this model to be 25 units with a standard deviation of 5 units.His cost to carry one unit is $50 per year and the cost of placing an order with his supplier is $25.He is open 52 weeks a year.Assume weekly demand is normally distributed.

a. What is Ray’s economic order quantity in this situation? (Hint: Use average annual demand in EOQ formula)

b. The lead-time for ordering from this supplier is 3 weeks. What are the mean and standard deviation of demand during lead time?

c. Ray wishes to provide a service rate of 95%. What should his reorder level be? How many units of safety stock will he carry?

d. If Ray increases his in-stock service rate to 99% how many units of safety stock will have to carry? What will his reorder level be?

Please solve on microsoft word and show all calculations with formulas used.

Reference no: EM132172474

Questions Cloud

The variety of products consumers purchase : On the surface, it may seem difficult to develop a classification system for the variety of products consumers purchase,

Would you keep our current system of judicial selection : Answer this question: The vast majority of the Texas judiciary is chosen through partisan elections. Is this a good way to select judges?

Technology for economic and clinical health act : Health Information Technology for Economic and Clinical Health Act (HITECH) as part of the American Recovery and Reinvestment Act -Stimulus Act (2009)

Examine a contemporary policy issue : This activity is an opportunity for you to closely examine a contemporary policy issue facing the state of Texas. Over its history, the Texas government.

How many units of safety stock will have to carry : If Ray increases his in-stock service rate to 99% how many units of safety stock will have to carry? What will his reorder level be?

The fundamental steps for new-product development : Compare the steps you’ve identified to the fundamental steps for new-product development found in section 3.2 of your textbook.

Many instances competitors are seen as being detrimental : In many instances competitors are seen as being detrimental, that is, having fewer competitors is healthier than having many.

Missions that proclaim noble purpose of some type : Most successful companies have missions that proclaim a noble purpose of some type.

Identify one angle or phenomena in the film : The key here is to identify ONE angle or phenomena in the film and FOCUS on that in the analysis. Each student should begin the paper by establishing its import

User Account

All Pages