Ask Question, Ask an Expert


Ask Management Theories Expert

The Norwitch Company uses a continuous review (s, Q) system for inventory control.  Weekly demand for an item, Pressure Valve #5 (PV5), is distributed Normally with a mean and standard deviation of 20 and 10 respectively.  Norwitch uses an order quantity of 200 units for PV5 and its supplier takes 5 weeks to fill an order.  Each unit of PV5 costs $50 and carrying charges are $0.20/$/yr.  Norwitch uses a 99% fill rate as a target service measure.

(a) find out the reorder point, s, that would satisfy Norwitch's target fill rate.  What is the likelihood that Norwitch has stocked out of PV5 when a new shipment arrives from its supplier?

(b) Assume Norwitch has worked out a new contract, accepted by all its customers, of being allowed up to one week to satisfy every demand.  Norwitch still uses a 99% "fill rate" as a target service measure.  Though, stockouts satisfied within a week is considered as good as demand satisfied from on-hand inventory.

How will you modify logic of computing the re-order point, s, to take account of the one-week grace period?  Sketch the average behavior of the (s,Q) system to show your reasoning.

(c) find out the reorder point for the new contract.  What is the safety stock?  On an average, how much inventory Norwitch has on hand when new shipment of PV5 arrives?  

(d) find out approximately the annual cost savings due to one-week grace period.

(e) What would be the impact of one-week grace period on Norwitch's customers? Should Norwitch and its customers make the inventory status of PV5 known to each other?   What good would that do?

Bookstore buys a popular freshman physics book at $30 each and sells it to students at $50 each.  The same book is used for Fall and Winter terms.  Demand for books is distributed normally with a mean of 150 and 200 for Fall and Winter terms, respectively.  Standard deviation of demand is 50, for Fall as well as Winter terms.  The demand for each term can be supposed to be independent.

The publisher comes up with the new edition every year, making old edition of the book worthless.  Bookstore simply throws away any leftover books at the end of the academic year (Winter Term). You have been asked to help the Bookstore in its purchasing decision for Physics books.

(a)  Assume the Bookstore used a newsvendor model to order books for each term.  How many books must they order for Fall term and for the Winter term?

(b) Bill Nye, the new purchasing guy, at the Bookstore thinks one can just use the total demand for the year and make one purchasing decision for the whole year.  How much must he order using this reasoning?  Why this order quantity is different than the sum of order quantities computed separately for Fall and Winter in part (a)?

(c)  What will YOU recommend to the bookstore?  Propose an ordering policy (with numbers, if you can) and describe why this is a better alternative.  Is your policy the best one can do?  Why (not)?
Saki, a local bar, consumes Mehboob, the popular non-alcoholic drink, at a steady rate of 10 cases/week. Saki generally buys Mehboob at $6/case, delivered to its door. However, the supplier is presently offering a promotional price of $5/case.

(a) If the carrying cost for Mehboob is $0.25/$/year, how many cases must Saki buy to take advantage of this promotion? Suppose that present promotion might end any day and that next promotion is unlikely in foreseeable future. Indicate any other assumption(s) which you make for your analysis.

(b) How would your decision in part (a) modify in each of the following cases?

i. If you had reasons to believe that your supplier gives this promotion annually;

ii. If you had reasons to believe that your supplier might give this promotion again sometime between six months to a year from now, equally likely;

iii. To eliminate the ill-effects of forward buying, your supplier permits you to order any quantity you like, but delays the delivery until you actually need it.

Management Theories, Management Studies

  • Category:- Management Theories
  • Reference No.:- M91607

Have any Question? 

Related Questions in Management Theories

1 what is coso and why is it important search the internet

1. What is COSO, and why is it important? Search the Internet for the term "Treadway Commission." What was the Treadway Commission, and what is its major legacy in the field of InfoSec? 2. Search the Internet for the ter ...

Supply chain management strategy proposaldevelop a supply

Supply Chain Management Strategy Proposal Develop a Supply Chain Management Strategy Proposal, specifically dealing with the following scenario. The scenario centers around the choice of a location for a new distribution ...

Question 1 what are the seven major elements of a customer

Question 1: What are the seven major elements of a customer vignette? Question 2: How do you make sure that image files are the right size for your Dreamweaver web page templates, and what file format do they need to be ...

Why do many organizations ban port scanning activities on

Why do many organizations ban port scanning activities on their internal networks? Why would ISPs an outbound port scanning by their customers? Why is TCP port 80 always of critical importance when securing an organizati ...

Supply chain management assignment learning outcomesafter

Supply Chain Management Assignment Learning Outcomes: After completing the module you should be able to: 1. Optimise the design of a supply chain to ensure strategic competitiveness in a global market. 2. Audit the opera ...

1 when choosing recommended practices what limitations

1. When choosing recommended practices, what limitations should you keep in mind? 2. What is baselining? How does it differ from benchmarking? 3. What are the NIST-recommended documents that support the process of baseli ...

The goal of this homework assignment is to set up and solve

The goal of this homework assignment is to set up and solve a Transportation Model problem in MS Excel using the Solver Add-in. MS Excel provides users with the Solver Add-in, giving them super powers to solve linear, in ...

Choose any existing company of your choice operating in

Choose any existing company of your choice operating in Singapore. The company can be from any industry. Imagine that you have been appointed as the Human Resource (HR) Manager of your chosen company. Your boss has asked ...

Task 1in task 1 answer each section with brief factual and

Task 1 In Task 1 answer each section with brief, factual and concise statements. 1 Prepare a detailed flow chart illustrating the process of quality control that is employed within your area of responsibility. Include no ...

Supply chain managementassignment informationthis

Supply Chain Management Assignment information: This assignment requires you to write a 2000 word original reportaddressing the following areas: Compare and analyse the supply chain of one service and one manufactured pr ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen