User Account

All Pages

What amount of safety stock is appropriate

Assignment Help Operation Management
Reference no: EM13927874

Given this information:
Lead- time demand 600 pounds
Standard deviation of lead time demand 52 pounds (Assume normality.)
Acceptable stockout risk during lead time 4 percent
a. What amount of safety stock is appropriate?
b. When should this item be reordered?
c. What risk of stockout would result from a decision not to have any safety stock?

Reference no: EM13927874

Questions Cloud

Old project with a initial investment : Calculate the NPV for a 30 year old project with a initial investment of $35,000 and a cash inflow of $8,000 per year. Assume the firm has an opportunity cost of 13%.
Arrangement with her financial advisor to invest : Eli has made an arrangement with her financial advisor to invest $3,600 a year in an equity mutual fund. The Financial adviser determines Eli should earn a minimum of 10% on the investment. If Eli follows this plan, how much will she have in 3 years?
Used as the initial cash flow for this building project : Marshall's & Co. purchased a corner lot in Eglon City five years ago at a cost of $590,000. The lot was recently appraised at $657,000. The company now wants to build a new retail store on the site. The building cost is estimated at $1,280,000. What ..
What is the expected return on this stock : The stock of Chocolate Galore is expected to produce the following returns, given the various states of the economy. What is the expected return on this stock?
What amount of safety stock is appropriate : What amount of safety stock is appropriate? When should this item be reordered? What risk of stockout would result from a decision not to have any safety stock?
What might debtholders do in response : David Lyons, CEO of Lyons Solar Technologies, ia concerned about his firms level of debt financing. The company uses short term debt to finance its temporary working capital needs, but it does not use any permanent (long term) debt. What is the value..
Explain would the rop be larger : Explain. Would the ROP be larger, smaller, or unaffected if the acceptable risk were 2 percent instead of 1 percent? Explain.
What is the appropriate reorder point quantity : What is the appropriate reorder point quantity, given that the company desires a service level of 95 percent, if that stockout risk for various levels of safety stock
How would you reply to the manager''s suggestion : How would you reply to the manager's suggestion? What order size would you recommend?

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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