What is the expected number of units out of stock

Assignment Help Operation Management

Reference no: EM132124796

Given a product that costs $70.08 per unit and has an average lead time of 12 days, standard deviation of lead time of 6 days, average demand of 144.4 units/day, standard deviation of demand of 11.6 units/day, stockout cost of $23.50 per unit, ordering cost of $270/order, inventory holding cost of 20% of item cost and needs to be in-stock 90% during lead time, calculate the following (you can leave all of these as decimals):

Assume the company is using a Continuous (EOQ) model to manage this inventory for parts a-d.

What is the economic order quantity?

What is the expected number of units out of stock during an order cycle?

What is the average inventory level?

What is the annual service level?

Assume the company is using a Periodic model to manage this inventory for parts e-f

What is the reorder period, in days? Answer must be shown in days.

Assume lead time is constant at 12 days. What is s', the standard deviation of demand during lead time plus the reorder period?

Reference no: EM132124796

Questions Cloud

How adverse selection impact lenders : Consider the market for small business loans. In the context of this market.

Basic economic questions : In what kind of economy is a central planning board or commission typically used to answer the basic economic questions?

How does the monopolies make production : How does the Monopolies Make Production and Pricing Decisions in Economics?

Onship between a firm costs and the price : What is the types of cost: fixed, variable, and marginal in economics, and methods that market power alters the relationship between a firm's costs

What is the expected number of units out of stock : What is the economic order quantity? What is the expected number of units out of stock during an order cycle?

Which view does david schmidtz endorse and why : Others say that we do better as constrained maximizers. Which view does David Schmidtz endorse and why?

Maintaining a viable place in the market : Are there manufacturers and retailers who have taken steps to reduce their pollution impact, both air quality and industrial pollution

Role of insurance in healthcare delivery and productivity : Discuss the role of insurance in healthcare delivery and productivity?

Company chain with central inventory operation : Thomas Kratzer is the purchasing manager for the headquarters of a large insurance company chain with a central inventory operation.

User Account

All Pages