Ask Question, Ask an Expert

+61-413 786 465

info@mywordsolution.com

Ask Operation Management Expert

Mobil Films buy a petroleum based raw material that it uses in its production process for films. The production process demand for this raw material can be approximated by a Normal random variable with mean 16000lbs and standard deviation 5000lbs per day. The supplier of the raw material is far away, and it takes 10 days for the supplier to deliver an order. Each time an order is issued to the supplier Mobil Films incur $375 fixed transportation cost and an additional $55 for handling the paperwork. Annual holding cost for each pound of raw material is 12% and each pound of raw material costs $1.12. Assume that the plant works for 320 days a year. Mobil Films use (r,Q) model to manage inventory and issues orders according to the EOQ.

a) What is the order quantity for raw materials in lbs?

b) If Mobil Films would like to be in stock 97% of all reorder periods, what would be the inventory level that Mobil Films should issue an order?

c) Based on your result in part b, what is the level of pipeline inventory: _____________

what is the level of safety stock: _____________

d) What is the total annual cost per year in managing this raw material inventory?

Operation Management, Management Studies

  • Category:- Operation Management
  • Reference No.:- M92590788

Have any Question?


Related Questions in Operation Management

Identify a company or industry that you are either familiar

Identify a company or industry that you are either familiar with or one with which you would like to become more familiar. As a purchasing professional of the chosen company or industry, your job is to determine the type ...

1 you are the marketing manager of a food product company

1. You are the marketing manager of a food product company that is considering entering the Indian market. The retail system in India tends to be very fragmented. Also, retailers and wholesalers tend to have long-term ti ...

You are managing a task on the critical path which has a

You are managing a task on the critical path which has a BAC of $500,000. The task is 80 percent complete. The team has completed 10 weeks on the task, and it was scheduled to take 10 weeks. You have spent $400,000 on th ...

Explore your own case in point identify the appropriate

Explore your Own Case in Point: identify the appropriate Global Entry Strategy for your Chosen Company After reading this chapter you should be prepared to answer some basic questions about your target company. Criticall ...

Little timmy signs a contract with big brad to buy big

Little Timmy signs a contract with Big Brad to buy Big Brad's 640-acre for $3,200,000. Big Brad orally offers to sell Big Brad's house in town for another $100,000. Little Timmy orally accepta that offer. At closing, Lit ...

Provide a brief summary of the mentor you interviewed

Provide a brief summary of the Mentor you interviewed including: Name, Job Title, Organization, time with organization, and time in current role. You may also briefly describe other parts of the Mentor's work and leaders ...

How do these four terms affect a large business like bmw

How do these four terms affect a large business like BMW? Evaluate and explain how they relate to BMW. Economic Order models Economic Production Quantities Strategies for managing uneven demand Tools and/or systems used ...

The cloud is the elastic leasing of pooled computer

The cloud is the elastic leasing of pooled computer resources over the Internet. Today, many organizations have begun to move their computing infrastructure to the cloud, and it is likely that in the future all, or nearl ...

1 you are making the case to the advisory board of your

1. You are making the case to the advisory board of your company for a business ethics program. In addition to avoiding the damage to your company’s reputation that results from unethical behavior, what are the remaining ...

1 what is the major advantage of an s corporation what are

1. What is the major advantage of an S corporation, what are the disadvantages? 2. If you had a business today would you invest in the BOP market? Why or Why not? 3. Porters Five forces Analysis for Microsoft Corporation ...

  • 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

Why might a bank avoid the use of interest rate swaps even

Why might a bank avoid the use of interest rate swaps, even when the institution is exposed to significant interest rate

Describe the difference between zero coupon bonds and

Describe the difference between zero coupon bonds and coupon bonds. Under what conditions will a coupon bond sell at a p

Compute the present value of an annuity of 880 per year

Compute the present value of an annuity of $ 880 per year for 16 years, given a discount rate of 6 percent per annum. As

Compute the present value of an 1150 payment made in ten

Compute the present value of an $1,150 payment made in ten years when the discount rate is 12 percent. (Do not round int

Compute the present value of an annuity of 699 per year

Compute the present value of an annuity of $ 699 per year for 19 years, given a discount rate of 6 percent per annum. As