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What is the optimal quantity of cash register tape

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Reference no: EM132320860

Fresh Market is open 360 days per year. Daily use of cash register tape (daily demand) has a mean of 20 rolls and a standard deviation of 5 rolls. Fresh Market pays a flat fee $10 for an order of cash register tape. It takes nine days for Fresh Market to receive the order it placed with its register tape supplier. It costs 20 cents if a roll of cash register tape is stored in a warehouse for a year. Fresh Market pays a unit price of $1 for the register tape. In general, Fresh Market does not want the register tape to run out 95% of the time (the corresponding z-value is 1.6). Keep 1-decimal in every step of your calculation. Please input numbers only, no symbols or letters.

  1. What is the optimal quantity of cash register tape to be ordered each time?
  2. What level of safety stock of the register tape does Fresh Market need to carry?
  3. Assume the optimal order quantity is 100 and the safety stock for the tape is 30. Use the assumed values and other given information above to calculate: how many times does Fresh Market need to buy register tapes annually in order to fulfill its usage needs?
  4. Assume the optimal order quantity is 100 and the safety stock for the tape is 30. Use the assumed values and other given information above to calculate: on average, how many register tapes does Fresh Market have in its inventory system?
  5. Assume the optimal order quantity is 100 and the safety stock for the tape is 30. Use the assumed values and other given information above to calculate the annual total inventory cost Fresh Market pays for the cash register tape.
  6. Assume Fresh Market's safety stock for the tape is 30 rolls. Use the assumed safety stock value and other given information above to determine at what inventory level that Fresh Market needs to re-order more tape?

Reference no: EM132320860

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