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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.
It is generally not appropriate to apply control charts to the same data that were used to derive the mean and limits. Why? What are the two possible outcomes if this is done, how
What is the difference between purchasing and supply management? What is the difference between a supply chain orientation and supply chain management?
how much?
Illustrate the strategic positioning tools? Strategic positioning tools according to Reck and Long: • Passive (as clerical and transaction based) purchasing functions only o
Sample Mean Chart - Control Charts for Variables This figure depicts a typical means chart, on which sample means would be progressively plotted, left to right. Two sets of c
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Question: You are the Operations Manager at Alien University and one of your responsibility is to manage the supplies of the University. One of your supplier has given you quan
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