How much reduction in holding cost per unit sold

Assignment Help Operation Management
Reference no: EM131875318

Question: Gap has started selling through its online channel along with its retail stores. Management has to decide which products to carry at the retail stores and which products to carry at a central warehouse to be sold only via the online channel. Gap currently has 900 retail stores in the US. Weekly demand for size large khaki pants at each store is normally distributed with mean 800 and std dev of 100. Each pant costs $30. Gap has a holding cost of 25%. Gap manages all inventories using a continuous review policy, and the supply lead time for Khaki is 4 weeks. The target cycle service level is 95%. How much reduction in holding cost per unit sold can Gap expect if moving Khaki pants from store to the online channel?

Reference no: EM131875318

Questions Cloud

What are the prices of call option and put option : What are the prices of a call option and put option with the following characteristics:
Received job offer from large investment bank : Tom Adams has received a job offer from a large investment bank as a clerk to an associate banker.
Determine the major goals associated with the new solution : The first three phases (planning, analysis and design). What tasks will need to be completed in order to address these phases for developing a solution.
What types of online conversations are appropriate : The policy states that "These Social Media Principles should guide your participation in social media, both personally as well as when you are acting.
How much reduction in holding cost per unit sold : Gap has started selling through its online channel along with its retail stores. Management has to decide which products to carry at the retail stores.
Recently won the super jackpot in washington state lottery : You have recently won the super jackpot in the Washington State Lottery. Using a discount rate of 7 percent, what is the present value of your winnings?
Conducts customer segment research : B&B has a new baby powder ready to market. Calculate the NPV for the firm if it conducts customer segment research,
What is the financial break-even point for project : Ayden's Toys, Inc., just purchased a $435,000 machine to produce toy cars. What is the financial break-even point for the project?
Is there an arbitrage opportunity available : Is there an arbitrage opportunity available?

Reviews

Write a Review

Operation Management Questions & Answers

  Book review - the goal

Operations Management is about a book review. Title of the book is "Goal". This book has been written by Dr. Eliyahu Goldartt. The book has been appreciated by many as one of those books which offers an insight into the operations and strategic capac..

  Operational plan in hospitality enterprise

Operational plan pertaining to a hospitality enterprise is given in detail in the solution. The operational plan is an important plan or preparation which gives guidelines regarding the role and responsibilities of each and every operation at all lev..

  Managing operations and information

Recognise the importance of a strategic approach to the development and deployment of organisational information systems. Demonstrate an understanding of the importance of databases and their integration to the organisation's overall information mana..

  A make-or-buy analysis

An analysis of the holding costs, including the appropriate annual holding cost rate.

  Evolution and contributor of operations management

Briefly explain Evolution and contributor of Operations management.

  Functions and responsibilities of an operations manager

A number of drivers of change have transformed the roles, functions and responsibilities of an operations manager over recent years. These drivers have not only been based on technological innovations but also on the need for organisations to develop..

  Compute the optimal order quantity

Compute the Optimal Order quantity of DVD players. Determine the appropriate reorder point.

  Relationship to operations practice in the organisation

Evaluate problems in operations and identify approaches to overcoming them. Critically evaluate operating plans and identify areas for improvement. Justify, implement and evaluate changes to operations in line with modern approaches.

  A make or buy analysis

Develop a report for Figi Fabricating that will address the question of whether the company should continue to purchase the part from the supplier or begin to produce the part itself.

  Prepare a staffing plan

Prepare a staffing plan showing the change of your unit from medical/surgical staffing to oncology staffing.

  Leadership styles in different organizations

Ccompare the effectiveness of different leadership styles in different organizations

  Risk management tools and models

Be able to understand the concept of risk, roles and responsibilities for risk management and risk management tools and models.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd