You are the owner of exoticcookingcom an online retailer of, Ask an Expert

Management Studies

You are the owner of ExoticCooking.com, an online retailer of hip, exotic, and hard-to-find spices. Consider your inventory of saffron, generally worth more by weight than gold. You order saffron from an overseas supplier with a shipping lead-time of four weeks and that you order weekly. Your average quarterly demand is normally distributed with a mean of 415 ounces and a standard deviation of 154 ounces. The holding cost per ounce per week is $0.75. You estimate that your back-order penalty cost is $50 per ounce. Assume that there are 4.33 weeks per month.

a. If you wish to minimize inventory holding costs while maintaining 99.25% fill rate, then what should your order up-to level be?

b. If you wish to minimize inventory holding costs while maintaining 99.25% in-stock probability, then what should your order up-to level be?

c. If you wish to minimize inventory holding and backorder penalty costs, then what should your order up-to level be?

d. If you arbitrarily decide an order up-to level of 250, what fraction of the demand will not be met immediately? What is the expected on-hand inventory at the beginning of a period?

View complete question

Operation Management, Management Studies

Category:- Operation Management
Reference No.:- M93132204

Have any Question?Write your Review or question?

Related Questions in Operation Management

Think of two leaders in a healthcare organization one is a

Think of two leaders in a healthcare organization. One is a good leader and the other you would consider not to be a great leader. Create a chart that shows each leader, and specific things that each leader does that rel ...

1 what are the characteristics of the organization

1. What are the characteristics of the organization behaviour?. 2. Describe the value proposition that a consumer would consider in evaluating your term project product/service and how branding affects value. 3. Looking ...

1 design an effective and creative marketing communication

1. Design an effective and creative marketing communication (print advertisement) of your own, for Pepsi any one of its products for the chosen target market. 2. A well-written report would contain the following elements ...

Discuss the importance of understanding communication

Discuss the importance of understanding communication styles of different cultures, as a critical variable when managing offshoring telephone and e-mail messaging service components as illustrated in the Chapter 7 openin ...

In this chapter you learned that a pampl statement is used

In this chapter you learned that a P&L statement is used to report revenue, expense and profit. In many cases, noncommercial foodservice operators such as those responsible for schools, colleges and universities, health ...

These questions is related managing transportation and

These Questions is related Managing Transportation and Distribution in Supply Chains- 1-“Milk runs” and “Cross-docks” are two terms that are used with respect to distribution of goods in supply chains. Explain what these ...

A software engineer is hired to develop banking software

A software engineer is hired to develop banking software, but, during a slow period, the employer asks the engineer to develop computer graphics for slot machines in a gambling casino. Slot machines are legal, but many p ...

A produce distributor uses 788 packing crates a month which

A produce distributor uses 788 packing crates a month, which it purchases at a cost of $11 each. The manager has assigned an annual carrying cost of 37 percent of the purchase price per crate. Ordering costs are $29. Cur ...

You have been informed that the ceo of your food processing

You have been informed that the CEO of your food processing company has recognized the labour union newly formed by the workers. However, no one in the Senior Leadership Team knows what to expect next from the new labour ...

1- describe the three types of franchising and provide an

1- Describe the three types of franchising and provide an example of each. Initial discussion and peer response posts should demonstrate critical thinking skills, engagement, and contain references. 2- Review the “Search ...

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