How performing the necessary paperwork, Operation Management

Assignment Help:

Annual demand for number 2 pencils at the campus store is normally distributed with mean 1,000 and standard deviation 250. The store purchases the pencils for 6 cents each and sells them for 20 cents each. There is a two-month lead time from the initiation to the receipt of an order. The store accountant estimates that the cost in employee time for performing the necessary paperwork to initiate and receive an order is $20, and recommends a 22% annual interest rate for determining holding cost. The cost of a stockout is the cost of lost profit plus an additional 20 cents per pencil, which represents the cost of loss of goodwill. a. Find the optimal values of Q and R. b. Substitute a Type 1 service level criterion of 95% for the stock-out cost. Find the values of Q and R. c. Substitute a Type 2 service level criterion of 98% for the stock-out cost. Assume that Q is given by the EOQ. Find the values of Q and R.


Related Discussions:- How performing the necessary paperwork

Explain the case of the marginalized workers, The Problem: The Case of the ...

The Problem: The Case of the Marginalized Workers You have decided to sub-contract out your grounds maintenance work. You have solicited bids for landscaping, a revamped irrigat

Explain how would you measure customer profitability, How would you measure...

How would you measure customer profitability? What approach would you use in maximizing customer lifetime value? Explain

Explain recommendations with the external distribution, Lucille Jenkins, th...

Lucille Jenkins, the CEO for the Durham International Manufacturing Company (DIMCO), believes that the company can significantly increase its operating profit by implementing suppl

Transforming inputs into outputs - productivity measures, Transforming Inpu...

Transforming Inputs into Outputs - Productivity Measures As will become clearer during the course of this chapter, a more quantitative definition of productivity cannot easily

Describe some possible strategic initiatives that sigma, Suggest some possi...

Suggest some possible strategic initiatives that Sigma could pursue to continue its growth.

Explain what are the advantages and disadvantages, Discuss the advisability...

Discuss the advisability of using modular assemblies in manufacturing. (What are the advantages and disadvantages?) To what extent can these arguments be applied to service product

Explain consistency and standardization, The big problem a franchisor faces...

The big problem a franchisor faces is maintaining quality control; franchisees do not always exhibit strong commitment to consistency and standardization. WHAT IS ANOTHER problem t

Calculate the average rate of installation of carpet, Carpet city recorded ...

Carpet city recorded the following data on carpet instalations over th past week. Use the data to calculate the average rate (in yards per hour) at which carpet can be installed

Explain strategic analysis, Strategic analysis is an important first step i...

Strategic analysis is an important first step in setting strategic direction

Factors for plant location choice - proximity to market, Factors for plant ...

Factors for plant Location choice - Proximity to Market Organization s may choose to locate facilities close to their market, not merely to minimize transportation costs, but

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