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7/25/2019 Review Questions Session 8
1/1
ReviewQuestionsSession8
ChaseJacobsChapter17Problem10(incoursepackage)
ChaseJacobsChapter17Problem15(incoursepackage)
Motorola
Motorolamaintainsaninventoryofcircuitboardsnecessaryfortheassemblyofcellulartelephones.
Motorolasuseoftheseboardsisfairlyconstantthroughouttheyear,averaging208,000boardsper
year. Theunitpurchasecostif$0.78perboard;theinventoryholdingcostis20%oftheunit
purchasecostperyear;andMotorolaestimatesthatitcosts$54toplaceeachordertoreplenishits
inventory. Wheneveranorderisplaced,Motorolassuppliertakesanywherefrom1to2weeksto
deliverthecircuit,sothatthedemandduringthedeliveryleadtimeisdistributednormallywith
mean6000andstandarddeviation500. WhatisMotorolasoptimal(Q,ROP)policyifmanagement
wantstosettheROPsuchthatthereisnomorethana3%chanceofastockoutduringeach
replenishmentleadtime?
Timbuk2Inc.
Timbuk2Inc.
manufactures
over
100,000
different
versions
of
amessenger
bags.
Suppose
Timbuk2
implementsacontinuousreviewmodeltomanageitsinventoryofaparticularplasticbuckle.
Demandisapproximatelynormallydistributedwithameanof1000unitsperweekandastandard
deviationof300. (Eachweeksdemandisindependentoftheotherweeks.)Sincethebuckleis
sourcedabroad,itisfairlyexpensivetoordertheitem($25perorder),andittakesfourweeksto
receivetheshipment. Theannualholdingcostsforthebuckleare$0.10.
HowmanyshouldTimbuk2orderandwhen(atwhichinventorylevel)shoulditorder,ifitstarget
servicelevelis99.5%? Whatwouldbetheservicelevelprovided,ifTimbuk2woulduseaROPof
4000unitsinstead?YoumayassumethatTimbuk2isoperating50weeksperyear.