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

Least cost methods, The NW  corner  rule  described  earlier considers only...

The NW  corner  rule  described  earlier considers only  the availability  and supply  requirements  in making  assignments. It takes  no account  of the shipping  costs  given  in

Components included in the reseach proposal, Components Included in the Pro...

Components Included in the Proposal Personnel In case the proposal is addressed to the funding agencies, the qualifications of the key project personnel for study should be

#title.L.L.p, #use the simple method to solve the following L.P.P. Maximi...

#use the simple method to solve the following L.P.P. Maximize Z =4X1 +10X2 subject to constraints, 2X1 +X2 2X1+5X2 2X1 +3X2 X1,X2 > 0

Conflicts of interest and related change in medical research, Conflicts of ...

Conflicts of Interest and Related Change in Medical Research The significant increase in private industry drug studies has spawned three other changes in medical research: med

Markov chain models - operation research model, These models are used for a...

These models are used for analyzing a system which changes over a period of time among various possible outcomes or states. The models while dealing with such systems describe tra

Action Phase, What is The proper meaning of action phase will u help me to ...

What is The proper meaning of action phase will u help me to lern it in deeply????

Linear programing, A factory employs unskilled workers earning $135 per wee...

A factory employs unskilled workers earning $135 per week and skilled workers earning $270 per week. It is required to keep the weekly age bill below $24,300. The machine requires

Lpp, A paper mill produces two grades of paper viz., X and Y. Because of ra...

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 i

Research analysis and project, Scenario: You work as a junior employee i...

Scenario: You work as a junior employee in the marketing department of a medium-sized Hong Kong organisation. One of your major tasks is your involvement in your organization's

LPP FORMULATION., A paper mill produces two grades of paper viz., X and Y. ...

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 i

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