Waiting lines UCONN

Waiting lines UCONN - ADDITIONAL PROBLEMS Attempt as many...

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ADDITIONAL PROBLEMS Attempt as many as you can INVENTORY MANAGEMENT: 1. The following table contains figures on the annual volume and unit costs for a random sample of 16 items for a list of 2000 inventory items at a health care facility. Item Unit Cost Usage 1 75 3 2 30 274 3 20 397 4 13 139 5 24 41 6 20 123 7 24 379 8 19 372 9 22 114 10 55 3270 11 105 594 12 55 482 13 35 198 14 40 37 15 12 215 16 20 116 Develop an ABC classification for these items. 2. A large bakery buys flour in 25-pound bags. The bakery uses an average of 4860 bags a year. Preparing an order and receiving a shipment of flour involves a cost of $4/order. Annual carrying costs are $30 per bag. a. Determine the economic order quantity. b. What is the average number of bags on hand? c. How many orders per year will there be? d. Compute the total cost of ordering and carrying flour. e. If ordering costs were to increase by $1 per order, how much would that affect the total annual cost? Solution: 36 bags, 18 bags, 135, $1080, increase by $127.48 3. A hardware store sells approximately 27,000 cans of a white paint a month. Because of storage limitations, a lot size of 4000 cans has been used. Monthly holding cost is 18 cents per can, and reordering cost is $60 per order. The company operates an average of 20 days a month. a. What penalty is the company incurring by its present order size on annual costs? b. The manager would prefer ordering 10 times each month but would have to justify any change in order size. One possibility is to simplify order processing to reduce the ordering cost (say using web orders). What ordering cost would enable the manager to justify ordering every other day?
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Solution: $16, $52.06 4. (If quantity discounts have been covered in class) A mail order house uses 18000 boxes a year. Carrying costs are 20 cents per box a year, and the ordering costs are $32. The following price schedule applies. Number of Boxes Price per box 1000 to 1999 $1.25 2000 to 4999 $1.20 5000 to 9999 $1.18 10000 or more $1.15 Determine the optimal order quantity. Solution: 10,000 boxes 5. Suppose the expected demand during lead time for a particular item is 300 units, with a standard deviation of daily demand of 30 . Suppose the lead time is 4 days. a. What is the reorder point that provides a 1% risk of stock out during lead time? b. The safety stock needed to provide a 1% risk of stock out during lead time? c. The safety stock needed to provide a 7% risk of stock out during lead time? Solution: 439.8, 139.8, 88.55 6. In the above problem, if a reorder point of 275 is used, what is the probability of stock out? Solution: 66.15% SIMULATION: 1. A car rental agency has collected data on the demand for luxury-class automobiles over the past 25 days. The data are shown below. Daily Demand
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This note was uploaded on 11/18/2009 for the course MGMT Quantative taught by Professor Na during the Spring '09 term at UConn.

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Waiting lines UCONN - ADDITIONAL PROBLEMS Attempt as many...

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