For this question assume the suppliers request in 7

5. (6 Points) (For this question, assume the supplier’s request in #7 above has been rejected by BB.)
Babson Bear’s CEO has directed the IM Team to implement an inventory buffer, or Safety Stock, for
the stuffing to improve service levels. He has suggested that the team approach this idea by using a
“rule of thumb”, and immediately add one month of supply of stuffing as the new Safety Stock. The
CEO has asked you to quantify all of the inventory management impacts of implementing this
approach. Be specific.
4

TOM Mid-Term #2 Spring, 2013
6. (8 Points) For the following statements, fill in the blanks with ONE of the offered words so that
each statement is true:
i. In BB’s inventory planning discussed above, the synthetic stuffing material is a(n)
dependent (independent or dependent?)
ii. If the Director’s estimate of the “Weighted average stuffing quantity / bear” turns out to be
too low for the “Make-to-Order” business the EOQ should be recalculated and the new result
will be higher (lower/higher?) than your EOQ result above.
Part B. Service Management and Queuing - (20 Points Total)
In the summer time students arrive at the College’s administrative services office at an average rate of
one every 20 minutes and their requests take on an average 10 minutes to be processed. The service
counter is staffed by one clerk, who works 6 hours/day. For credit, show your work.
1. (3 points) How many students are waiting in the line to see the clerk? How much time, on average,
does a student spend waiting in the queue?
2. (3 points) How many hours a day is the clerk idle?
5

TOM Mid-Term #2 Spring, 2013
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3. (2 points) Suppose the “customer” goodwill loss for the administration due to students waiting in
the system is $20.00/hr. What is the loss of goodwill in dollar terms that the administration incurs in one
hour?

TOM Mid-Term #2 Spring, 2013