Purchase Solution

Calculating optimal daily order

Not what you're looking for?

Ask Custom Question

I need a hand getting started with this question.

A bagel shop buys each bagel for $0.08 and sells each bagel for $0.35. Leftover bagels at the end of the day are purchased by a local soup kitchen for $0.03 per bagel. The shop's owner has observed for the daily demand, Q, the following probabilities, f(Q):

Q 0 5 10 15 20 25 30 35
f(Q) 0.05 0.10 0.10 0.20 0.25 0.15 0.10 0.05

Answer the following questions:
What is the optimal daily order in multiples of 5 (include the model name and formula)?

If the daily demand is normally distributed (the mean and variance can be obtained from the table above), then what is the optimal daily order?

Purchase this Solution
Solution Preview

A bagel shop buys each bagel for $0.08 and sells each bagel for $0.35. Leftover bagels at the end of the day are purchased by a local soup kitchen for $0.03 per bagel. The shop's owner has observed for the daily demand, Q, the following probabilities, ...

Solution provided by:
Gaurav Agarwal, MS
Education
  • BE, Bangalore University, India
  • MS, University of Wisconsin-Madison
Recent Feedback
  • "Your explanation to the answers were very helpful."
  • "What does 1 and 0 means in the repair column?"
  • "Went through all of the formulas, excellent work! This really helped me!"
  • "try others as well please"
  • "Thank you, this helped a lot. I was not sure how to plug in those numbers to a formula. This was a great help. Now I have to figure out how to explain cost of capital is used in net present value analysis, and how cost of capital is used in net present value analysis. This stuff gets confusing."
Purchase this Solution
Free BrainMass Quizzes
Organizational Leadership Quiz

This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.

Six Sigma for Process Improvement

A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.

Introduction to Finance

This quiz test introductory finance topics.

Employee Orientation

Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.

Operations Management

This quiz tests a student's knowledge about Operations Management

View More Free Quizzes
Related BrainMass Solutions

  • Inventory Management: Safety Stock, Re-Order, EOQ

    507680 Inventory Management: Calculating Safety Stock, Re-Order point, EOQ, Average Inventory, and Total Inventory Cost The average demand faced by a retailer in the past is 200 units/day with a standard deviation of daily demand of 15 units/day.

  • Operations Management

    Optimal # of orders = annual demand / eoq = 30,000/774.6 = 38.7 or 39 orders (rounding) c. What is the optimal interval (in working days) between orders? Optimal Interval in days = EOQ / Daily demand = 774.6/ (30,000/300) = 7.74 days d.

  • Calculating the inventory costs and optimal reorder point

    What is the optimal reorder point based upon ordering 250 units each time an order is placed? Reorder Point=lead time*average daily demand=4*15=60 units Solution depicts the steps to estimate the inventory costs in the present ordering policy.

  • Calculating EOQ and inventory costs

    What is the optimal reorder point based upon using the EOQ? Reorder Point=lead time*average daily demand=4*15=60 units 6. How many orders per year will be necessary based upon using the EOQ?

  • EOQ

    EOQ is Economic Order quantity. It indicates the optimal order size How to determine what goes into Order Cost. How to determine what goes into Carrying Cost. What can go wrong in calculating EOQ.

  • Calculating optimal production batch size

    414616 Calculating optimal production batch size 1. Jim's Knives manufactures knives for a certain retail store. His skilled workers can produce 10 knives a day of their best-selling knife (known as Bowie knife).

  • Calculating various inventory paremeters

    Determine: a) Optimal order size b) Minimum total annual inventory cost c) Order cycle time Now assume that the demand pattern for the cookies has changed so that the daily demand can now be approximated by a normally distributed random variable

  • Stochastic Inventory Model: An Example

    What is the optimal daily order, in multiples of 5? 2. If the daily demand is normally distributed (the mean and variance can be obtained from the table above), then what is the optimal daily order?

  • Dot Com - Optimal Order Quantity

    f) What is the inventory position immediately after an order has been placed? a) What is Dotcom optimal order quantity?

View More Related Solutions