What is the distribution of annual demand

Assignment Help Operation Management

Reference no: EM132192710

Starbucks sells gourmet coffee in bags. Each bag costs $10 and is sold at $25. It costs $20 to Starbucks to place an order to its coffee supplier. The replenishment lead time from the supplier is 3 months. Suppose that the demand during lead time is normally distributed with mean 50 and standard deviation 25. The internal rate of return for Starbuck's is 20% per year, which can be regarded as the carrying cost of inventory. Starbucks uses continuous replenishment policy to replenish its coffee bag stock.

a. What is the distribution of annual demand, i.e., mean and standard deviation

b. What is the EOQ lot size if we ignore the demand variability (uncertainty)?

c. What is the reorder point that achieves 96.5% of service level?

Reference no: EM132192710

Questions Cloud

Show that people would deposit anything in a bank : Use the analysis and graph in your answer to the question above, show that people would deposit anything in a bank if the bank deposit interest rate

Define issues of methodology with regards interdisciplinary : Discuss issues of Methodology with regards to interdisciplinary, points of view and the forces at work in the economy. Consider the definition of Institutional.

What actions should the bank manager take : Bank AAA has $15 million of fixed-rate assets, $30 million of rate-sensitive assets, $25 million of fixed-rate liabilities, $20 million of rate-sensitive.

The enterprise architecture versus distributed system : Compare and contrast the meaning of enterprise architecture versus distributed system.

What is the distribution of annual demand : What is the distribution of annual demand, i.e., mean and standard deviation

The past for the military aircraft market domain : What are the key pivot points that resulted in a significant departure from the past for the military aircraft market domain?

What output data is generated by the program : What output data is generated by the program? Describe how the input data will be transformed into the output data.

Is good customer service learned trait or is it just natural : Is good customer service a learned trait or is it just natural? Please explain.

Write a page test plan for portable speaker with thermostat : Write 1-2 page test plan (can be more if needed) for a portable speaker with Thermostat.

User Account

All Pages