Monthly demand of a highly perishable product is 183 units, Ask an Expert

Management Studies

Monthly demand of a highly perishable product is 183 units. The unit cost of this product is $15. This product has a standard deviation of 2 units per day.

There is no information on the current service level for this product. This product is managed using the periodic review model. The orders are placed twice weekly on Mondays and Thursdays with a lead time of one day. The cost of ordering is $20 for each order.

A safety stock representing one day of sales is kept and annual holding cost represents 15% of the product's value.

a) What is the service level is currently offered for this product?

b) What would be the impact (average quantity on hand and total holding cost) of increasing the service level to 99%?

c) Should this article be managed using a reorder point system where quantity ordered would be the EOQ? Justify your answer.

View complete question

Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M92696009

Have any Question?Write your Review or question?

Related Questions in Operation Management

As a leader you often need to display or clarify a concept

As a leader, you often need to display or clarify a concept. A matrix is a grid that contains information and offers a visual model of ideas. For this assignment, you will create a matrix that explains leadership theorie ...

At the start of the semester custom kicks personnel were

At the start of the semester Custom Kicks personnel were struggling to quickly cstomize their shoe inserts to their customers' feet. This hurt sales as customers became frustrated during the customization process and wou ...

Question research one legal case or recent event involving

Question : Research one legal case or recent event involving a tort and one legal case or recent event related to criminal law. Each case or event should have taken place within the past two years. Write in-depth briefs ...

Describe the features and benefits of marijuana

Describe the features and benefits of Marijuana Dispensaries as a project, including product or service. Analyze strengths and potential pitfalls, including what customer needs to expect to fill, the advantages that will ...

Question - using mm1 model to analyze a typical cash lane

Question - Using M/M/1 model to analyze a typical cash lane at Exit 53 toll plaza. The paper has to be completed in Standard American English grammar.

The selling price of a product is set at 30 the firm can

The selling price of a product is set at $30. The firm can outsource the production and pay $25 per unit. Alternatively, the firm can invest in assembly line X and Y and produce the product on its own. Assembly line X re ...

1 in its relatively short life span uber has attracted a

1. In its relatively short life span, Uber has attracted a lot of media attention. Why is this? What is it about the Uber business model that is both compelling and polarizing? In addition, why has Uber managed to achiev ...

1 list and describe 4 suggestions to provide suppliers why

1. List and describe 4 suggestions to provide suppliers why they should place inventories closer to your facility 2. Reflect on what you have read about pharmacotherapy medications and assess your perceptions on their us ...

Audio visual corporationaudio visual corporation avc

Audio Visual Corporation Audio Visual Corporation (AVC) manufactures and sells visual display equipment. Headquartered in Boston, it has seven sales offices with nearby warehouses that carry its inventory of new equipmen ...

The impact of branding1 why do people believe popular

The impact of branding 1. Why do people believe popular brands? 2. Can brands improve the quality of customers’ wellbeing?

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

Recent Questions

Ask Operation Management Expert