# Answers to inventory-2007f - = S Q D = \$3,259.49 Purchasing...

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Answers to “Inventory MGT and Control” 1. Service level P = .95, D = 5000, d = 5000/365, T = 14 days, L = 10 days, σ = 5 per day, and I =150. I z L T d q L T - + + = + ) ( 2 2 ) 5 )( 10 14 ( ) ( + = + = + L T L T = 24.495 From Standard normal distribution, z = 1.64 150 ) 495 . 24 ( 64 . 1 ) 10 14 ( 365 5000 - + + = q = 218.94 219 3. a. ) 10 ( 33 . 250 ) 25750 ( 2 2 = = H DS Q opt = 1975.23 1975 From Standard normal distribution, z = 1.64 d LT z L d R + = = 515(1) + (1.64)25 = 556 b. Holding cost = 10 ) 33 (. 2 1975 2 = H Q = \$3,258.75; Ordering cost = ) 250 ( 1975 25750
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Unformatted text preview: = S Q D = \$3,259.49; Purchasing cost = DC =515*50*10 = 257500 Total cost = holding cost + ordering cost + purchasing cost = 264018 c. Holding cost = 10 ) 33 (. 2 2000 2 = H Q = \$3,300.00 Ordering cost = ) 200 ( 2000 25750 = S Q D = \$2575; Purchasing cost is the same as above. Therefore, the savings would be \$6,518.24 – (3300+2575) = \$643.24 for the year....
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## This homework help was uploaded on 04/18/2008 for the course MGBU 3438 taught by Professor Dr.sarahj.wu during the Spring '08 term at Fordham.

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