How much more safety stock would be needed

Assignment Help Operation Management

Reference no: EM132115631

A large Internet Retail Distributor uses 24000 boxes each month to pack and ship its goods. The boxes cost $1.20 each. The company estimates the annual holding cost for a box at 30% of the box cost. The purchasing department of the company estimates that the cost to place an order is $15.

The Internet Retail distributor has decided to use the ROP system for determining when to place an order. The purchasing manager has determined that the monthly demand for crates of 24000 has a standard deviation of 2500. The current supplier of the boxes has a .5 month lead time.

1. If the manager wants a 90% customer service level on the crates, what should the ROP be for this item?

2. What would the reorder point be for the paper?

3. If the manager were to switch to a 95% customer service level how much more safety stock would be needed?

Reference no: EM132115631

Questions Cloud

Crisis could strengthen your organizational commitment : Are there ways in which such a crisis could strengthen your organizational commitment? Which form (or forms) would be strengthened?

How does repko ultimately define the word discipline : How does Repko ultimately define the word discipline? A discipline is a powerful lens through which practitioners interpret the world.

Types of public influence company marketing environment : how do the different types of public influence a company marketing environment. Develop a fact pattern that would be modern arson that would not be common law

Prepare the revenues budget and cost of goods sold budget : ACC5213 MANAGEMENT ACCOUNTING with a STRATEGIC PERSPECTIVE Assignment, University of Southern Queensland, Australia. Prepare the revenues budget

How much more safety stock would be needed : If the manager were to switch to a 95% customer service level how much more safety stock would be needed?

Describe the key management issues : Describe the key management issues in your organization (or choose a large organization most of us are familiar with) and explain how IT can help in addressing

What type of correlation technique : What type of correlation technique would be most appropriate for this study?

Target practice-segmentation-market research case : Company: Zuna Motors: “Target Practice” Topics to consider: Segmentation, Market Research Case. What is the best strategic direction to take?

What resources you have to help you through the class : It is important to know what resources you have to help you through this class. Browse the following resources, and, in 75 to 150 words.

User Account

All Pages