The university cafeteria uses 700 cases of canned fruit cocktail per year and is open 50 weeks a year. The manager calcu
Posted: Wed Apr 27, 2022 1:55 pm
The university cafeteria uses 700 cases of canned fruit cocktail
per year and is open 50 weeks a year. The manager calculates
holding cost to be $10 per case per year and the cost of processing
each order to the supplier to be $20.
i. How
many cases should be ordered each time?
ii. The
lead time for receiving an order is 1 week. Assuming
demand is a constant 14 cases per week, what is the re-order point
(ROP)?
iii. Suppose
weekly demand is better modeled as a normal distribution with a
mean of 14 cases and a standard deviation of 3
cases. You wish to maintain a service level (probability
of no stockout) of 95%. What is the ROP under this
scenario?
per year and is open 50 weeks a year. The manager calculates
holding cost to be $10 per case per year and the cost of processing
each order to the supplier to be $20.
i. How
many cases should be ordered each time?
ii. The
lead time for receiving an order is 1 week. Assuming
demand is a constant 14 cases per week, what is the re-order point
(ROP)?
iii. Suppose
weekly demand is better modeled as a normal distribution with a
mean of 14 cases and a standard deviation of 3
cases. You wish to maintain a service level (probability
of no stockout) of 95%. What is the ROP under this
scenario?