What is the probability that the dairy will run out of this

Assignment Help Operation Management
Reference no: EM13927881

Demand for walnut fudge ice cream at the Sweet Cream Dairy can be approximated by a normal distribution with a mean of 21 gallons per week and a standard deviation of 3.5 gallons per week. The new manager desires a service level of 90 percent. Lead time is two days, and the dairy is open seven days a week.
a. If an ROP model is used, what ROP would be consistent with the desired service level? How many days of supply are on hand at the ROP, assuming average demand?
b. If a fixed interval model is used instead of an ROP model, what order size would be needed for the 90 percent service level with an order interval of 10 days and a supply of 8 gallons on hand at the order time? What is the probability of experiencing a stockout before this order arrives?
c. Suppose the manager is using the ROP model described in part a. One day after placing an order with the supplier, the manager receives a call from the supplier that the order will be delayed because of problems at the supplier's plant. The supplier promises to have the order there in two days. After hanging up, the manager checks the supply of walnut fudge ice cream and finds that 2 gallons have been sold since the order was placed. Assuming the supplier's promise is valid, what is the probability that the dairy will run out of this flavor before the shipment arrives?

Reference no: EM13927881

Questions Cloud

What rop is appropriate if the acceptable risk : What order quantity is optimal? What ROP is appropriate if the acceptable risk of a stockout is 1.5 percent?
When should the manager reorder to achieve the desired : When should the manager reorder to achieve the desired probability ? Why might the model not be appropriate if seasonality were present?
When the amount on hand drops to 625 boards : The delivery time is normal with a mean of six days and a standard deviation of 1.10 days. What is the probability that the supply of circuit boards will be exhausted before the order is received if boards are reordered when the amount on hand dro..
The injection molding department of a company : The injection molding department of a company uses an average of 30 gallons of special lubricant a day. The supply of the lubricant is replenished when the amount on hand is 170 gallons.
What is the probability that the dairy will run out of this : Assuming the supplier's promise is valid, what is the probability that the dairy will run out of this flavor before the shipment arrives?
Invest in a portfolio containing stock : You have $136,000 to invest in a portfolio containing Stock X, Stock Y, and a risk-free asset. You must invest all of your money. Your goal is to create a portfolio that has an expected return of 12 percent and that has only 74 percent of the risk of..
What is the probability that the dairy will run out of this : Assuming the supplier's promise is valid, what is the probability that the dairy will run out of this flavor before the shipment arrives?
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?

Reviews

Write a Review

Operation Management Questions & Answers

  Clearly describe robert nardelli''s leadership style

Clearly describe Robert Nardelli's leadership style in terms of Leadership Theory, incorporating the following theories :

  A small firm intends to increase the capacity

A small firm intends to increase the capacity of a bottleneck operation by adding a new machine. Two alternatives, A and B, have been identified, and the associated costs and revenues have been estimated. Annual fixed costs would be $38,000 for A and..

  Illustrate the major barriers to implement

Illustrate what, if any, are the major barriers to implementing a lean system at Copper Kettle Catering. Illustrate what would you recommend that Wayne also Janet Williams do to take advantage of lean concepts in operating CKC.

  Identify differences between two methods of collaboration

Identify the differences between the two methods of collaboration: CPFR and S&OP. How are they similar and how are they different? Explain the differences in the organization objectives they are trying to achieve.

  Organizations create value and influence stakeholders

Describe and explain how organizations create value and influence stakeholders? What is the role of entrepreneurship in this process?

  Calculate default risk premium

The real risk-free rate, r*, is 2.5%. Inflation is expected to average 2.8% a year for the next 4 years, after which time inflation is expected to average 3.75% a year.

  Why was each decision good or bad

give an example of a good decision you made that resulted in a bad outcome. use the six steps in the decision process to present your decision. also give an example of a bad decision you made that had a good outcome. why was each decision good or ..

  Which of these two methods has the greater accuracy

Based on data for periods 11 through 20 as shown in the table, which of these two methods has the greater accuracy if MAD and MSE are used? (Round your answers to 2 decimal places.)

  What conditions are associated with each alternative

Decision making under certainty occurs when the decision-maker knows with reasonable certainty what the alternatives are and what conditions are associated with each alternative.

  Describe the importance of learning curves

Describe the importance of learning curves in a services-based operation and how they can be used to increase organization efficiency. Please provide a specific example(s).

  The net cost of a level strategy which pays overtime and as

tiger toys is a retailer in omaha nebraska.nbsp business is seasonal for tiger toys. the following table shows labor

  Online collaboration within virtual team is also facilitated

Our telecommunications software allows you to meet with customers over the Internet for training, Web-based meet- ings can be held, and other online collaboration within virtual teams is also facilitated. We need more trained staff members, office sp..

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!

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