d. Per ton of aluminum demanded each week? (Round your answer 2 decimal places)
ID: 380585 • Letter: D
Question
d. Per ton of aluminum demanded each week? (Round your answer 2 decimal places)e. Suppose their on- hand inventory is 5100 tons on average. What in-stock probability do they offer to their customers? (Round your answer to 3 decimal places) Anvil's uuovks requires on aveva e 2900 tons oFaluminam cach wc with a standard deviation of loosto orders is gwceks. The holding ne weels is $11. They alerate Round eur ausuar ta neaiest The lead time to veceive theh intes er have on ordexa tens averagr hawmany tons do they hve n had (Roundu be teir aveyale heldin1 cast IL 2 décima OLA or wees d, theiravera3c inventory were A-1 ooo uu ,ts what would be their avrehodi
Explanation / Answer
Weekly demand, d = 2900 tons
Std dev of weekly demand, s = 1000 tons
Ordering cost, k = $ 1000
Holding cost, h = $ 11
Lead time L = 9 weeks
Service level (alpha) = 98%
a) Tons they have to order (Economic order quantity) = SQRT(2Dk/h) = SQRT(2*2900*1000/11) = 726
b) For 98% service level, z = NORMSINV(.98) = 2.054
Safety stock = z*s*SQRT(L) = 2.054*1000*SQRT(9) = 6162 tons
Average tons they have on hand = Q/2 + Safety stock = 726/2 + 6162 = 6525 tons
c) For average inventory = 4500 tons, weekly holding cost = 4500*11 = $ 49,500
d) For average inventory = 11000 , weekly holding cost = 11000*11 = $ 121,000
e) On hand inventory = 5100 tons, z = (5100-2900)/1000 = 2.2
F(z) = NORMSDIST(2.2) = 0.9861
In-stock probability = 0.986
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.