The average amount used daily by jeans company is 4000 yards with deviation of 5

Question

The average amount used daily by jeans company is 4000 yards with deviation of 500 yards. Lead time required to receive order is 3 days. Jeans palaces order every week on Mondays (5 working days). Jeans wants to limit the probability of stock out and work stoppage to 1%. When an order was placed this Monday, 3000 yards was left in inventory.
What model is appropriate? A. EOQ B. EPQ C. Q, R with random demand D. Periodic review
How many yards should they order this time? A. 32,295 B. 31,326 C. 31,904 D. 30,295
The average amount used daily by jeans company is 4000 yards with deviation of 500 yards. Lead time required to receive order is 3 days. Jeans palaces order every week on Mondays (5 working days). Jeans wants to limit the probability of stock out and work stoppage to 1%. When an order was placed this Monday, 3000 yards was left in inventory.
What model is appropriate? A. EOQ B. EPQ C. Q, R with random demand D. Periodic review
How many yards should they order this time? A. 32,295 B. 31,326 C. 31,904 D. 30,295

What model is appropriate? A. EOQ B. EPQ C. Q, R with random demand D. Periodic review
How many yards should they order this time? A. 32,295 B. 31,326 C. 31,904 D. 30,295

Explanation / Answer

C. They should use a periodic review system, as the demand is not constant.

A. 32,295 yards yarn should be ordered this time.

Daily Demand µD 4000 SD of Daily Demand D 500 Review Period 5 days Lead Time (L) 3 days Service level 99% Z-value 2.33 Safety stock (ss) 3295 ss = ZD(L+R) On-Hand Inventory (OH) 3000 Reorder Point (ROP) 32295 ROP = µD*(L+R) + ss - OH

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.