Question

Miso Computer produces computer parts and buys platinum from one of its suppliers. Each part carries 1 ounce of copper. Annual demand for parts follows a normal distribution with an average of 7000 parts and a standard deviation of 2000. The copper supplier takes 5 weeks to deliver the material after the order is placed. Miso uses 40% annual interest to compute the cost of maintaining inventory. Copper buys it at $0.25 per ounce. The company uses a short material cost of $25 per ounce of copper and putting an order to the supplier costs $80. Note: Show off 52 weeks in a year. Careful with unit conversion.

a) Suppose Miso is interested in the decision to ensure that 85% of cycles meet all demand:
i.  What should be the lot size? (whole number):
ii.   And the size of the reorder point? (whole number):

b) Assume that you want to calculate the average total cost of annual inventory, including setup, material maintenance cost, and short cost; provide the individual values for each of these terms (two decimal places, annually):
i. "Setup":
ii. Keeping the material:
iii. Costos por cortos de material:

c)   What type 1 service level are you guaranteeing with the system in part a? (provide service level in percentage terms, two significant decimal places):

d) What type 2 service level are you guaranteeing with the system in part a? (provide service level in percentage terms, two significant decimal places):

Answer 1