What is the mean and variance of the demand in lead time

Assignment Help Operation Management

Reference no: EM131115550

QQ-Mart is a local grocery store. It sells a certain type of cheese. Excess demand can be backordered. The monthly demand of the cheese follows a normal distribution with mean of 250 and variance of 225. QQ-Mart reviews its inventory continuously and will place order with size Q when the inventory level hits R. The fixed cost per ordering is $10. The unit purchase price is $5. The annual interest rate of 10% is used to estimate the holding cost. The lead time for purchasing the cheese from the manufacturer is one week. QQ-mart wants to achieve a service level target that no stock-out in 95% the cycles. (Assume there are four weeks in one month.)

1) What is the mean and variance of the demand in lead time?

2) What is Q and R such that the desired service level can be achieved?

3) What is the safety stock?

Reference no: EM131115550

Questions Cloud

Line between effective change and chaotic change : Where is the line between effective change and chaotic change? What are some elements a manager needs to keep in mind in order to create effective change and avoid chaos?

Examine two substance abuse prevention programs in us : In a 500-750 word paper, examine at least two substance abuse prevention programs in the United States. Refer to the National Registry of Evidence-based Programs and Practices website to help you successfully complete your paper. Make sure you cho..

What is the percentage of assets that inventory represents : At which points in Whole Foods’s distribution system does inventory exist? Using Whole Foods’s balance sheet and income statement answer the these questions: What is the percentage of assets that inventory represents? What is the number of inventory ..

Wynn company offers a set of building blocks to customers : The company expects 30% of the UPC codes to be sent in. During 2010, 120,000 UPC codes were redeemed. Prepare Wynn's December 31, 2010, adjusting entry.

What is the mean and variance of the demand in lead time : QQ-Mart is a local grocery store. It sells a certain type of cheese. Excess demand can be backordered. The monthly demand of the cheese follows a normal distribution with mean of 250 and variance of 225. QQ-Mart reviews its inventory continuously and..

How many hours of labour are required to gather the data : BBMK302-Research Proposal Assignment - How many hours of labour are required to gather the data and write the report and how many weeks will it take to do the research? Is this an acceptable timeframe?

Evaluate a budgeting system at any governmental level : Evaluate a budgeting system at any governmental level. Analyze the scope and sequence of budgeting in terms of sources of revenues, purpose of government expenditures, budget cycles, budget preparation, and debt administration.

Explain with justifications as a newly appointed cfo : ABCLTDis a medium size company manufacturing two electronic household products - X and Yfor the last 10 years. It has been operating in a market where four other companies produce and sell products which are similar to those of ABCLtd.

What is the proportion of demand that are met from stock : A paint store in Rolla sells a specific paint. The monthly demand of this paint follows a normal distribution with mean of 100 and variance of 144. The excess demand can be backordered. It takes the paint store one month to receive the order it place..

User Account

All Pages