Individual Assignment 4

Individual Assignment 4 - =2*4= 5.6568 z=1.65...

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Tim O’Brien MGT 302 Individual Assignment #4 4/21/11 Problem 3: a) D=4*12 months= 48 units per year S= $15 per order C=$25 per unit I=30% per year Q=√(2SD/iC) Q=√(2*15*48/.3*25) Q=13.86 Q=14 units per order b) Order frequency= D/Q =48/14 Order frequency=3.43 orders per year c) Ordering cost=S*(D/Q) 15*3.43 Annual Ordering Cost=$51.45 Holding cost=i*C*(Q/2) (.30)(25)(14/2) Annual Holding Cost=$52.50 Problem 7: a) z=1.65 for 95% service level m=450 units σ=250 units R=m+(z*σ)=450+(1.65*250) R=863 units (Reorder point) Problem 10: a) Q=14 units per order R=m+z*σ m=48/6=8
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Unformatted text preview: =2*4= 5.6568 z=1.65 R=8+(1.65*5.6568) R=17.33=18 units b) P=(2*S/iCD) P=(2*15/(.30)(25)(48) P=.2887 years P=3.5 months T=m+z* m= (48/(12/5.5))=22.02 z=1.65 =(2+3.5)*4=9.38 T=22.02+1.65*9.38 T=38 units c) The pros of using the P system are schedule replenishment and less record keeping. The cons of using the P system are that the P system requires a larger safety stock. This is more expensive. The Q system is a better inventory system for keeping track of more expensive items....
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Individual Assignment 4 - =2*4= 5.6568 z=1.65...

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