Question
In: Operations Management
1. A company operating under a continuous review system has an average demand of 50 units...
1. A company operating under a continuous review system has an
average demand of 50 units per week for the item it produces. The
standard deviation in weekly demand is 20 units. The lead-time for
the item is six weeks, and it costs the company $30 to process each
order. The holding cost for each unit is $10 per year. The company
operates 52 weeks per year. Use the Z-table (normal distribution
table) that I posted in the inventory folder. Q2) What is the
desired safety stock level if the company has a policy of
maintaining a 90% cycle-service level?
A. Approximately 63 units
B. Approximately 48 units
C. Approximately 34 units
D. Approximately 57 units
2. A company operating under a continuous review system has an
average demand of 50 units per week for the item it produces. The
standard deviation in weekly demand is 20 units. The lead-time for
the item is six weeks, and it costs the company $30 to process each
order. The holding cost for each unit is $10 per year. The company
operates 52 weeks per year. Use the Z-table (normal distribution
table) that I posted in the inventory folder. Q3) What is the
reorder point if the company finally decides to implement a 95
percent cycle-service level?
A. 380
B. 335
C. 425
D. 260
Solutions
keosha answered 6 months agoRelated Solutions
The Discount Appliance Store uses a continuous review system (Q system).
The Discount Appliance Store uses a continuous review system (Q system).One of the company's items has the following characteristics:- Demand =10 units/week (assume 52 weeks per year)- Ordering or Setup Cost (S)=$ 45) order- Holding cost (H)=$12 unit/year- Lead Time (L)=3 weeks (constant)- Standard Deviation in Weekly Demand = 8 units- Cycle-Service Level =70%What is the EOQ for this item?What is the desired safety stock?What is the desired reorder point R?What is the total annual cost?Suppose that the current policy...
Explain whether the continuous review or periodic review inventory system is likely to result in higher...
Explain whether the continuous review or periodic review
inventory system is likely to result in higher safety stock. Which
is likely to require more time and effort to administer? Why
Explain whether the continuous review or periodic review inventory system is likely to result in higher...
Explain whether the continuous review or periodic review
inventory system is likely to result in higher safety stock. Which
is likely to require more time and effort to administer? Why??
Weighted Average Cost Flow Method Under Perpetual Inventory System The following units of a particular item...
Weighted Average Cost Flow Method Under Perpetual Inventory
System
The following units of a particular item were available for sale
during the calendar year:
Jan. 1
Inventory
10,000
units at $75.00
Mar. 18
Sale
8,000
units
May 2
Purchase
18,000
units at $77.50
Aug. 9
Sale
15,000
units
Oct. 20
Purchase
7,000
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inventory system. Determine the cost of goods sold for each sale
and the inventory...
Weighted Average Cost Flow Method Under Perpetual Inventory System The following units of a particular item...
Weighted Average Cost Flow Method Under Perpetual Inventory
System
The following units of a particular item were available for sale
during the calendar year:
Jan. 1
Inventory
30,000
units at $30.00
Mar. 18
Sale
24,000
units
May 2
Purchase
54,000
units at $31.00
Aug. 9
Sale
45,000
units
Oct. 20
Purchase
21,000
units at $32.10
The firm uses the weighted average cost method with a perpetual
inventory system. Determine the cost of merchandise sold for each
sale and the inventory...
Weighted Average Cost Flow Method Under Perpetual Inventory System The following units of a particular item...
Weighted Average Cost Flow Method Under Perpetual Inventory
System
The following units of a particular item were available for sale
during the calendar year:
Jan. 1 Inventory 30,000 units at
$30.00
Mar. 18 Sale 24,000 units
May 2 Purchase 54,000 units at
$31.00
Aug. 9 Sale 45,000 units
Oct. 20 Purchase 21,000 units at
$32.10
The firm uses the weighted average cost method with a perpetual
inventory system. Determine the...
Weighted Average Cost Flow Method Under Perpetual Inventory System The following units of a particular item...
Weighted Average Cost Flow Method Under Perpetual Inventory
System
The following units of a particular item were available for sale
during the calendar year:
Jan. 1
Inventory
4,000 units at $40
Apr. 19
Sale
2,500 units
June 30
Purchase
4,500 units at $44
Sept. 2
Sale
5,000 units
Nov. 15
Purchase
2,000 units at $46
The firm uses the weighted average cost method with a perpetual
inventory system. Determine the cost of goods sold for each sale
and the inventory...
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Eversoll Inc. uses the periodic inventory system. June 1 On hand, 50 units
Eversoll Inc. uses the periodic inventory system.June 1 On hand, 50 units @ $15.00 each $ 750.00 5June 5 Purchased 115 units @ $15.10 each 1,736.50 14June14 Purchased 75 units @ $15.20 each 1,140.00Total cost of goods available for sale $3,626.5030 On hand, 90 units1. If Eversoll uses the FIFO (First In First Out) inventory method, the amount assigned to the June 30 inventory would bea. $1,354.00 b. $1,366.50 c. $1,590.42 d. $1,594.002. If Eversoll uses the weighted average cost...
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