1
BUAD 311T
Solutions to Homework 6
.
1.
Management Consultant
λ
= 1200/yr., K = 10,
h
unknown
(a)
If Q* = 100
2*10*1,200
100
2*10*1,200
10000
$2.40/
h
h
h
unit
year
⇒
=
⇒
=
⇒
=
•
(b)
Q* =
50
60
.
9
200
,
1
*
10
*
2
=
(c)
10*1,200
100
(
100)
9.60
$600/
100
2
10*1,200
50
(
50)
9.60
$480/
50
2
C Q
yr
C Q
yr
=
=
+
•
=
=
=
+
•
=
Î
Pay the
Management
Consultant
2.
JCA Chapter 17 Problem 24
Service level P = .98,
d
= 5000/365 boxes per day, T = 14 days, L = 3 days,
σ
= 10 boxes
per
day, and I = 60 boxes.
I
z
L
T
d
q
L
T
−
+
+
=
+
σ
)
(
2
2
)
10
)(
3
14
(
)
(
+
=
+
=
+
σ
σ
L
T
L
T
= 41.23 boxes
From Standard normal distribution, z = 2.05
60
)
23
.
41
(
05
.
2
)
3
14
)(
365
/
5000
(
−
+
+
=
q
= 257.40
→
257 boxes
3. JCA Chapter 17 Problem 25
*
2
2(500)100
.20(500)
K
Q
h
λ
=
=
= 31.62
→
32 refrigerators
=
L
σ
10 refrigerators
From Standard normal distribution, z = 1.88
L
z
L
d
R
σ
+
=
= (500/365)(7) + (1.88)10 = 9.59 + 18.8 = 28.39
→
28 refrigerators
Order 32 refrigerators when the on-hand inventory level reaches 28 refrigerators

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