Determine the weekly demand and lead time, Operation Research

Assignment Help:

Family Application specialises in selling major appliances for use in kitchen remodelling.  One of its more popular items is the SubZero refrigerator.  Over the past 40 weeks, the store has collected data regarding the weekly demand for this refrigerator.  On the basis of these data, the following demand distribution has been estimated:

The store's policy is to reorder up to 15 refrigerators whenever the inventory on hand

Weekly Demand                     Probability

0                                              0.25

1                                              0.15

2                                              0.15

3                                              0.25

4                                              0.1

5                                              0.1

reaches five or fewer at the end of a week. The holding cost for each refrigerator is $2 per week, and the cost of reordering is $50. If a customer wants a SubZero refrigerator and Family is out of stock, the customer will go elsewhere and the sale is lost. The company estimates that it suffers a goodwill cost of $40 for each lost sale.

Current inventory is seven refrigerators. Lead time for delivery can be described by the following distribution:

Lead Time                   Probability

1 week                         0.3

2 weeks                       0.5

3 weeks                       0.2

(a)  Conduct a 10-week simulation of Family's inventory situation regarding the SubZero refrigerator to determine the total cost for this period. Use random number generator of Microsoft Excel to determine the weekly demand and to determine the lead time.  

(b)  SubZero is  offering Family a new policy of automatically delivering five refrigerators every two weeks. Conduct a 10-week simulation of Family's inventory situation under this plan and determine the total cost for the 10-week period.

(c)  On the basis of your answers to part (a) and (b), what would you recommend to Family management regarding the supplier's offer?


Related Discussions:- Determine the weekly demand and lead time

Semeter 5, explian completelly the operation reserch

explian completelly the operation reserch

Calculate, A paper mill produces two grades of paper viz X and Y. Because o...

A paper mill produces two grades of paper viz X and Y. Because of raw material restrictions, it cannot produce more than 400 tons of grade X paper and 300 tons of grade Y paper in

Linear programming, Q3. Solve the following Linear Programming Problem usi...

Q3. Solve the following Linear Programming Problem using Simple method. Maximize Z= 3x1 + 2X2 Subject to the constraints: X1+ X2 = 4 X1 - X2 = 2 X1, X2 = 0

Dynamic programming models, Dynamic programming may be considered thoutgr...

Dynamic programming may be considered thoutgrowth of mathematical programming and involves the optimization of multistage( sequence of inter related decisions) decision process

Describe the service tax law in usa and concept of negative, Question 1 ...

Question 1 X Ltd. has Unit C which is not functioning satisfactorily. The following are the details of its fixed assets: Asset Date of acquisiti

Operation research, Discuss the methodology of operation research

Discuss the methodology of operation research

Describe the objectives of tax planning, Question 1 Describe the obje...

Question 1 Describe the objectives of tax planning. Explain the factors to be considered in tax planning. Question 2 Describe the categories in Capital assets. Mr.

process technolgy, 1 strategic implication of product and process decision...

1 strategic implication of product and process decisions 2 process planning and design 3 work measurement

CONCEPT OF DUALITY IN LPP, EXPLAIN THE CONCEPT OF DUALITY IN LPP THROUGH A ...

EXPLAIN THE CONCEPT OF DUALITY IN LPP THROUGH A LIFE SITUATION

Write Your Message!

Captcha
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