What order upto level should supreme select to minimize

Assignment Help Finance Basics
Reference no: EM13477967

Supreme Cola is a supplier of fountain equipment to restaurants, bars and cafeterias.

The fountain equipment is manufactured at their York PA plant site. A national distribution center (DC) for the fountain equipment is also maintained adjacent to the plant. Supreme has one common platform design to which they add various features and accessories to create 10 different product options. The lead time for manufacturing and delivering a batch of products to the distribution center is 2 weeks. They review inventory and order weekly. For product ACola, Supreme uses a Normal distribution with mean 25 and standard deviation 20 to model weekly demand. Demands across weeks are independent. ACola sells for $15,000 and they enjoy a 50% gross margin. The annual holding cost for inventory in the DC is 25% of the product's cost. In the event that a customer order cannot be filled from the warehouse due to an out-of-stock situation, Supreme expedites the manufacture and delivery of the item. It estimates that such expediting increases their cost by $770 per unit.

a. What order upto level should Supreme choose to minimize their inventory for ACola while achieving at least a 99.25% in-stock probability?

b. Supreme uses an order up-to policy with a base stock level equal to 250 for ACola. What is the probability that Supreme will have more than 40 units on order of that product at the start of any given week?

Reference no: EM13477967

Questions Cloud

Radio shack sells a 32gb flash drive weekly demand for the : radio shack sells a 32gb flash drive. weekly demand for the 32gb flash drive in one of their stores is poisson
Demands are independent across the weeks orders are placed : an industrial company requires argon gas cylinders for its work. weekly demand is normally distributed with a mean of
Strong corporate cultures have a powerful effect on : strong corporate cultures have a powerful effect on employee behavior. discuss how this creates inadvertent control
How do you believe nuclear health care organization- : how do you think the nuclear health care organization- whether hospital or something other than a hospital - will be
What order upto level should supreme select to minimize : supreme cola is a supplier of fountain equipment to restaurants bars and cafeterias.the fountain equipment is
Assume that jim is interested in making sure that the : jim is a cfo of a mid-sized construction company. one of his key tasks is to ensure that the company has sufficient
Compose a paper discussing your course of action and how : you are the ceo of a small chain of womens clothing stores. you notice that your total sales are beginning to dwindle
To maximize the profits with manuels plan what is the : hotel manager basil fawlty and his resourceful assistant manuel run a 26 room hotel in a quaint little town called
Area of interest fall reduction and prevention among the : area of interest fall reduction and prevention among the elderly populationbackground question- what can prevent falls

Reviews

Write a Review

Finance Basics Questions & Answers

  I investor closed out her position on fifth day find her

an investor sold seven contracts of june2012 corn. the price per bushel was 1.64 and each contract was for 5000

  The statement of cash flows reflects cash flows from

1. which of the following statements is correct?a. typically a firmrsquos dps should exceed its eps.b. typically a

  How much can she spend each year after she retires

how much can she spend each year after she retires? Her first withdrawal will be made at the end of her first retirement year.

  The dividend growth rate is expected to be constant at 15

huang companys last dividend was 1.25. the dividend growth rate is expected to be constant at 15 for 3 years after

  What is the project discounted payback

Fernando Designs is considering a project that has the following cash flow and WACC data. What is the project's discounted payback?

  What is capitals after-tax wacc

If the returns required by investors are 10 percent, 11 percent, and 15 percent for the debt, preferred stock, and common stock, respectively, what is Capital's after-tax WACC? Assume that the firm's marginal tax rate is 40 percent.

  Compute depreciation charge

Pemberton Corporation bought a machine costing $300,000 that had an estimate useful life of 6-years and residual value of $18,000. The machine is expected to produce 3,525,000 units during its useful life;

  What is the expected dollar return on the gamble

Suppose that a person won the Florida lottery and was offered a choice of two prizes: (1) $500,000 or (2) a coin-toss gamble in which he or she would get $1 million if a head were flipped and zero if a tail.

  Calculating future value of savings

You have been asked to assist your friends with some personal financial planning. Following their current budget they find they are able to save approximately $10,000 per year.

  Explain why and how the demand and supply curve will shift

Be sure to explain why and how the demand and supply curve will shift, whether the Euro will appreciate or appreciate or depreciate relative to the Yen, or whether the net effect is ambiguous. Label your graphs completely.

  Show the modigliani miller proposition

Suppose a world without taxes. Two companies, Mix Corporation and Dial Corporation are identical in every way except for their capital structures. Mix, an all-equity firm, has 200000 shares of common stock outstanding;

  You have just won the lottery the prize is payable in one

1. if the americell corp. has a quick ratio of 1.8 a current ratio of 3.2 an inventory turnover of 7 times total

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