Thomas cain is the purchasing manager for multiple store, Ask an Expert

Management Studies

Thomas Cain is the purchasing manager for multiple store Mattress firm. The demand for the most popular mattress is 6000 units per year. The cost of each mattress is $120, and inventory carrying cost is $15 per unit per year. The average ordering cost is $50 and it takes 5 days for an order to arrive. The stores operate 250 days a year. Find

a. The optimal order quantity.

b- The number of orders per year.

c- The number of working days between orders.

d- The total cost of inventory including the cost of 6000 units.

e- Find the basic reorder point (Expected demand during lead time).

f- Find reorder point if demand during lead time has normal distribution with standard deviation of 4 and we desire only 1% chance of stock out. (Hint ROP = expected demand during lead time + Safety stock).

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Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M91630183

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