Question

In: Operations Management

Ben Parker, Executive Producer for Epic Productions Film Company, is trying to decide when to reorder...

Ben Parker, Executive Producer for Epic Productions Film Company, is trying to decide when to reorder the 35 millimeter film his photographers use for publicity photos. 35 mm film is used by the Epic photographers at a fairly constant rate, with an average demand during leadtime of 75 rolls and a variance of 25 rolls. (Ben would agree that the daily usage of 35 mm film seems to be normally distributed.) The leadtime on an order of 35 mm film is 5 days, and there are 250 working days in the year.

a. Suppose Ben decides to reorder 35 mm film when there are 86 rolls left in stock. How much safety stock is implied by this reorder point?

b. What is the service level implied by Ben’s reorder point of 86 rolls?

c. If a publicity photographer runs out of film, it is usually impossible to arrange a future photo session with the movie stars who are being photographed. Keeping this in mind, Ben Parker decides that he wants a service level of 97.72% for his 35 mm film inventory policy. What is his reorder point for 35 mm film?

d. If Ben decides to have extra 4 rolls of 35 mm as safety stock, what is the ROP? And what is the probability of stock-out?

     

Solutions

Expert Solution

keosha answered 10 months ago
Next > < Previous

Related Solutions

"An oil producer is trying to decide if and when it should abandon an oil field....
"An oil producer is trying to decide if and when it should abandon an oil field. For simplicity, assume the producer will abandon immediately (year 0), at the end of year 1, at the end of year 2, or stay at least through the next two years. The major uncertainty is the price of oil, which can go up or down in any year. In each year, there is a 0.33 probability the oil price will go up and a...
"An oil producer is trying to decide if and when it should abandon an oil field....
"An oil producer is trying to decide if and when it should abandon an oil field. For simplicity, assume the producer will abandon immediately (year 0), at the end of year 1, at the end of year 2, or stay at least through the next two years. The major uncertainty is the price of oil, which can go up or down in any year. In each year, there is a 0.49 probability the oil price will go up and a...
"An oil producer is trying to decide if and when it should abandon an oil field....
"An oil producer is trying to decide if and when it should abandon an oil field. For simplicity, assume the producer will abandon immediately (year 0), at the end of year 1, at the end of year 2, or stay at least through the next two years. The major uncertainty is the price of oil, which can go up or down in any year. In each year, there is a 0.37 probability the oil price will go up and a...
when a company is trying to decide on which capitalization option is best for the company...
when a company is trying to decide on which capitalization option is best for the company why are the following three important? Company’s capital structure, Company’s working capital and Asset performance of the company. ​
Ben Halls is trying to decide whether to lease or purchase a new car costing $18,000....
Ben Halls is trying to decide whether to lease or purchase a new car costing $18,000. If he leases, he’ll have to pay a $600 security deposit and monthly payments of $450 over the 36-month term of the closed-end lease. Ben could earn 1% on the amount of any down payment or security deposit. On the other hand, if he buys the car then he’ll have to make a $2,400 down payment and will finance the balance with a 36-month...
Pretend you are a producer and want to start a film company. You have a friend...
Pretend you are a producer and want to start a film company. You have a friend with an incredible life story. You have the idea to write a script based on your friend’s life that you hope to finance and produce by your company. You see a lot of potential in TV, film and maybe even mass media/video games. Other companies have approached your friend in the past and you know he has turned down offers for $10,000. Your friend...
A company is trying to decide whether to bid for a certain contract or not. They...
A company is trying to decide whether to bid for a certain contract or not. They estimate that merely preparing the bid will cost $10000.If their company bids, then they estimate that there is a 50% chance that their bid will be put on the “short-list;” otherwise their bid will be rejected. Once “short-listed” the company will have to supply further detailed information (entailing costs estimated at $5000). After this stage their bid will either be accepted or rejected. The...
A company is planning to move to a larger office and is trying to decide if...
A company is planning to move to a larger office and is trying to decide if the new office should be owned or leased.  Information about cash flows for owning versus leasing is provided as follows.  Assume that the cash flows from operations will remain the same level over a 10-year holding period.  If purchased, the company will invest $385,000 in equity and finance the remainder with an interest-only loan that has a balloon payment due when the property is sold.  The after-tax cash...
A company is planning to move to a larger office and is trying to decide if...
A company is planning to move to a larger office and is trying to decide if the new office should be owned or leased. Cash flows for owning versus leasing are estimated as follows. Assume that the cash flows from operations will remain level over a 10 year holding period. If purchased, the company will invest $355,000 in equity and finance the remainder with an interest-only loan that has a balloon payment due in year 10. The after-tax cash flow...
When playing roulette at a​ casino, a gambler is trying to decide whether to bet ​$15...
When playing roulette at a​ casino, a gambler is trying to decide whether to bet ​$15 on the number 28 or to bet ​$15 that the outcome is any one of the three possibilities 00 comma 0 comma or 1. The gambler knows that the expected value of the ​$15 bet for a single number is negative $ 1.58. For the ​$15 bet that the outcome is 00 comma 0 comma or 1​, there is a probability of StartFraction 3...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT