Statistics-An office supply store must determine the best inventory

QUESTION

1. Use the
following information to answer the next six questions:
An office supply store must
determine the best inventory policy for ordering boxes of copier paper. Annualdemand is nearly constant at 10,400 boxes and
when orders are placed, an entire shipment arrives at once. The cost per box is $24 and the inventory
holding cost is 25%. It costs $60 each time to place an order, including preparation
time and communication charges, and the lead time is 3 days.The store is open 260 days a year (5 days a
week, 52 weeks per year).
What is daily demand?

QUESTION 2
1. What is the
optimal order quantity (Q*)?

QUESTION 3
1. What is the
reorder point?

QUESTION 4
1. How many orders
should the company place each year?

QUESTION 5
1. How often
should an order be placed? (Enter number of days)

QUESTION 6
1. What is the
total annual inventory cost for the company?

QUESTION 7
1. Use the
following information to answer the next four questions:
A weekly sports magazine
publishes a special edition for the World Series. The sales forecast is for the number of
copies to be normally distributed with mean 500,000 copies and standard
deviation 25,000 copies. It costs $.35 to print a copy, and the
newsstand price is $1.95. Unsold copies can be sold to a recycling
center for $.15 each.
What is the per unit cost of
overestimation?

QUESTION 8
1. What is the per
unit cost of underestimation?

QUESTION 9
1. How many copies
should the sports magazine print to minimize inventory costs?

1 points
QUESTION 10
1. What’s the probability
they will have copies left over?

QUESTION 11
1. Use the
following information to answer the next six questions:
Brown Manufacturing produces
commercial refrigeration units in batches. It costs about $100 to set up the
manufacturing process, and the holding cost per unit is about 75 cents per
year. When the production process has been set up, 60 refrigeration
units can be manufactured daily. The demand during the production period has
traditionally been 50 units per day. Brown operates its refrigeration unit
production area 200 days per year.
What is the recommended production lot size (Q*)?

QUESTION 12
1. If there is a
five-day lead time to set up the line, what is the recommended reorder point?

QUESTION 13
1. How many
production runs should be made each year?

QUESTION 14
1. What is the
cycle time?

QUESTION 15
1. What is
themaximuminventory?

QUESTION 16
1. What is Brown
Manufacturing’s total annual inventory cost?

QUESTION 17
1. Use the
following information to answer the next four questions:
The Fitness Shop is considering
ordering a special model exercise machine. Each unit will cost the shop $400 and it will
sell for $500. Any units not sold at the regular price will be sold at the
year-end model clearance sale at half-price. Assume that demand follows a normal
probability distribution with μ = 25 and σ = 6.
What is the per unit cost of overestimation?

QUESTION 18
1. What is the per
unit cost of underestimation?

QUESTION 19
1. What is the
recommended order quantity?

QUESTION 20
1. What is the probability
The Fitness Shop will sell all their exercise machines?

I am currently having a hard time with this assignment; can anyone please help break these down with me so I can understand it better?

ANSWER

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