Purchase Solution

Inventory Management problem:ROP, Fixed interval model

Not what you're looking for?

Ask Custom Question

Demand for walnut fudge ice cream at the Sweet Cream Dairy can be approximated by a normal distribution with a mean of 21 gallons per week and a standard deviation of 3.5 gallons per week. The new manager desires a service level of 90 percent. Lead time is 2 days, and the dairy is open seven times a week. (work in terms of weeks)

Using the ROP model, there are 8.39 gallons to be consistent with the SL level...

A) If a fixed interval model is used instead of ROP, and the order size is 34 gallons, 90 percent SL, and order interval of 10 days and a supply of 8 gallons on hand, what is the probability of experiencing a stockout before this order arrives?

B) Suppose the manager is using the ROP MODEL, One day after placing an order with the supplier, the manager receives a call from the supplier that the order will be delayed . The supplier promises to have the order there in 2 days. The manager checks the supply and finds that 2 gallons have been sold since the order was placed. What is the probability that the dairy will run out of the supply before the shipment arrives?

Purchase this Solution
Solution Summary

This posting contains solution to following inventory problem:

Purchase this Solution
Free BrainMass Quizzes
Organizational Behavior (OB)

The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.

Organizational Leadership Quiz

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

Managing the Older Worker

This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce

Operations Management

This quiz tests a student's knowledge about Operations Management

Marketing Management Philosophies Quiz

A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.

View More Free Quizzes
Related BrainMass Solutions

  • Inventory management problem:EOQ, ROP, P model

    In other words risk of stock out = 1 -0.9773 = 0.0228 0r 2.28% Inventory management problem:EOQ, ROP, P model

  • Economic Order Quantity Technique

    What are some different companies that could benefit from using this type of inventory management and why? What is the Economic Order Quantity technique and what are the basic assumptions the model formula follows?

  • Fixed-Order Quantity Model

    This posting provides solution to several problems on operations management including Fixed-Order Quantity Model, fixed-time period ordering system, inventory system, stockout cost etc

  • Wholesaler Quality Control & Supply Chain Management

    351067 Quality Control & Supply Chain Management Locate a firm that incorporates the fixed order quantity system, fixed order period system, or a hybrid system to its management of inventory. * Identify the type of inventory system it uses.

  • EOQ Model : Uses

    531653 Uses EOQ Model What are the uses of the EOQ model? What questionable assumptions are being made by the EOQ model? Please give me some examples to reference. What is working capital management?

  • Cash Cycles: Audi

    References: http://scm.ncsu.edu/scm-articles/article/economic-order-quantity-eoq-model-inventory-management-models-a-tutorial#3 http://www.investopedia.com/terms/c/cashconversioncycle.asp#axzz2Ial4oOMi Render, Barry et al. (2003).

  • Importance of Evaluating an Organization's Fixed Assets.

    Some of the ways a firm can improve the management of its working capital accounts are: (1) Reducing its fixed cost, (2) Monitoring its cash flow ration, (3) Managing inventory and pricing, (4) reducing the ICP and A/R CP, and (5) Deferring the A/P DP

  • Fixed Order Quantity Inventory Model

    515934 Fixed Order Quantity Inventory Model A company is planning for its financing needs and uses the basic fixed-order quantity inventory model.

  • Accounting in the organization

    To reduce inventory costs, management is considering implementing a "Just In Time"(JIT) inventory management.

View More Related Solutions