Exam 18: Special Inventory Models

Scenario C.3 Consider an item with the following discrete demand distribution for a one-period inventory decision. This item experiences a seasonal demand pattern.A profit of $15 per unit is made if the item is sold in season,but a loss of $10 per unit is incurred if the item is sold after the season is over. -Use the information in Scenario C.3.What is the payoff when 40 units are ordered but a demand of 30 materializes?

Pick any three products that occupy both extremes and the midpoint of the one-period model continuum.Explain why the products occupy these positions and identify the ideal inventory model for determining the best order quantity or each.

As an inventory manager,you must decide on the order quantity for an item.Its annual demand is 679 units.Ordering costs are $7 each time an order is placed,and the holding cost is 10% of the unit cost.Your supplier provided the following price schedule. What ordering-quantity policy do you recommend?

Consider a manufacturer that uses the economic production lot size (ELS)model.What must be the relationship be between production rate and demand rate for the producer to spend exactly the same time in the production and demand portion of the inventory cycle as they spend in only the demand portion of the inventory cycle?

Consider a manufacturer that uses the economic production lot size (ELS)model.What must be the relationship be between production rate and demand rate for the producer to spend double the time in the production and demand portion of the inventory cycle than they spend in only the demand portion of the inventory cycle?

In a noninstantaneous replenishment model,as the daily demand approaches the daily production rate,the:

The time between orders is given by the formula ELS/D.What is the significance of its inverse,D/ELS?

Scenario C.1 Jerry Allison is in charge of production for a small producer of plumbing supplies.The cricket model has an estimated annual demand of 12,000 units and can be produced at a production rate of 90 units per day.The company produces (and sells)the cricket 300 days per year.Setup cost to produce this model averages $22 and the item has a holding cost of $3 per unit per year. -Use the information in Scenario C.1.How many production runs per year are needed if Jerry chooses to produce at his economic production lot size (ELS)?

A pencil supplier just introduced quantity discounts.The price schedule follows. XYZ store's annual demand remains at 350 units and ordering cost at $2 per order.If annual holding cost is 30 percent of the pencils' per-unit price,what order quantity should XYZ select to minimize all costs?

Scenario C.3 Consider an item with the following discrete demand distribution for a one-period inventory decision. This item experiences a seasonal demand pattern.A profit of $15 per unit is made if the item is sold in season,but a loss of $10 per unit is incurred if the item is sold after the season is over. -Use the information in Scenario C.3.What is the payoff when 40 units are ordered but a demand of 50 materializes?

The economic production lot size represents the maximum quantity of on-hand inventory for a manufacturer.

In a single period model,if the in-season demand is unexpectedly high,then the profit can be calculated as ________.

Walter White must satisfy an annual demand of 50,000 pounds per year.The setup cost for each batch is $6500 and once the setup is complete,the product may be produced at the rate of 1800 pounds per day.There is a holding cost of $15 per unit per year and the plant operates on a 350-day production year.Determine the relevant parameters and sketch the inventory cycle through two complete cycles,labeling all lines and vertices.