ESI 6323 HW7 Word document

# ESI 6323 HW7 Word document - 1 CSL = 0.95 L = 2 weeks D =...

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1. CSL = 0.95, L = 2 weeks, D = 300/week, σ D = 200 D L = LD = 2 × 300 = 600, σ L = sqrt(L) × σ D = sqrt(2) × 200 = 283 Using Excel, ss = NORMSINV(0.95)*283 = 465 ss = ROP – DL à ROP = DL + ss = (300 × 2) + 465 = 1,065 2. T = 3 weeks D T+L = (T + L) × D = (3 + 2) × 300 = 1,500 σ T+L = sqrt(T + L) × σ D = sqrt(3 + 2) × 200 = 447 Using Excel, safety inventory = NORMSINV(0.95)*447 = 735 OUL = D T+L + ss = 1,500 + 735 = 2,235 3. ESC = (1 – fr) × Q = (1 – 0.99) × 500 = 5 Using GOALSEEK, safety inventory = 485 [check: using Excel, -485*(1-NORMSDIST(485/283))+283*NORMDIST(485/283,0,1,0) = 5] ROP = (300 × 2) + 485 = 1,085 7. Use Excel with Equation 11.12: = “ss” = NORMSINV(0.95)*SQRT(8)*(2000+2200+1400+1600+800+2400) = 48,384 or 48,385 Since NORMSINV(0.95) and SQRT(8) are constants, they can be factored out and then multiplied at the end. With central DC in Europe, use Excel with Equations 11.13 and 11.15: σ D C =SQRT(SUMSQ(2000,2200,1400,1600,800,2400)) = 4445 “ss” = NORMSINV(0.95)*SQRT(8)*4445 = 20,681 SAVING OF SAFETY INVENTORY EPSON CAN EXPECT = 48,384 – 20,681 = 27,703 8. Equation 11.16: Holding-cost savings on aggregation per unit sold =NORMSINV(0.95)*SQRT(8)*0.25*200/(3000+4000+2000+2500+1000+4000) *(2000+2200+1400+1600+800+2400- SQRT(SUMSQ(2000,2200,1400,1600,800,2400))

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