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https://www.mathxl.com Student PlayerHomework.aspx?homeworkld-4641 1 1 5238 questionid=7&flushed-true;&cld-48287078; center inayes MQM 227-Operations Management Spring 2018 Austin Karpinski 3/5/18 10:05 PM Homework: Chapter 12: Homework Save Score: 0 of 1 pt 6 or 9 (7 cornplete) HW Score: 80%, 8 of 10 pts Problem 12.45 Question Help * Mr Beauttul, an organiatian that sells weight tra ning sets, has an ordering costot$45 tor the RB-1 set (HH-1 stands for Body Beautitul Number 1) The carrying cost tor HR-1 is $1s per year To meet demand, Mr Heautiful crders large quantities of BB 1 5 times year. The stockout cost for BB 1 is estmated to be $45 per set. Over the past several years. Mr. Beautiful has observed the following demand during the lead tme for BB 1: Demand During Lead Time Probabili 0.1 0.2 0.2 0.2 0.2 40 60 The reorder point for BB-1 is 60 sets. What level of safety stock should be maintained for BB-1? I he optimsl quantity of satety stack which minimizes expected total cost is sets fenter your response es vhole number) Fnter your answer in the answer bnx and then click Check Answer All partsshowing Clear All Check 1005 PMExplanation / Answer
The carrying cost is $ 18.00 Order 5 times per yr Stock out cost $ 45.00 Demand during lead time Probability 40 0.1 50 0.2 60 0.2 70 0.2 80 0.2 90 0.1 Reorder point 60 Stock out cost = Units short * Probability * Stock out cost * No. of orders per unit Safety Stock Additional Carrying Cost (in $) Annual stockout Cost (in $) Total Cost (in $) 30 30 * 18 = 540 0 540 20 20 * 18 = 360 10*0.1*45*5=225 585 10 10*18=180 20 * 0.1 * 45 * 5 + 10*0.2*45*5= 900 1080 0 0*18 = 0 30 * 0.1 * 45 * 5 + 10 * 0.2 * 45 * 5 + 20 * 0.2 * 45 * 5= 2025 2025 Lowest cost is for safety stock = 30 sets ROP = 60 + 30 = 90 sets
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