The M. M. Pod Company is a retail chain that specializes in camping equipment. They carry a special tent designed for high altitudes. The demand is generally normally distributed at 20 per week with a standard deviation of 3. The store is open 52 weeks a year. The cost of each tent is $150 and the holding cost (including opportunity and physical holding) is 15%. The ordering cost is $55. The lead time for receiving a shipment of new tents is 6 weeks and is fairly constant. They only want a 5% chance of a stockout. Q1. What is the optimal order quantity? Q2. What should be the safety stock to be? Q3. What is the reorder point ?
The M. M. Pod Company is a retail chain that specializes in camping equipment. They carry a special tent designed for high altitudes. The demand is generally normally distributed at 20 per week with a standard deviation of 3. The store is open 52 weeks a year. The cost of each tent is $150 and the holding cost (including opportunity and physical holding) is 15%. The ordering cost is $55. The lead time for receiving a shipment of new tents is 6 weeks and is fairly constant. They only want a 5% chance of a stockout. Q1. What is the optimal order quantity? Q2. What should be the safety stock to be? Q3. What is the reorder point ?
Purchasing and Supply Chain Management
6th Edition
ISBN:9781285869681
Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Chapter16: Lean Supply Chain Management
Section: Chapter Questions
Problem 10DQ: The chapter presented various approaches for the control of inventory investment. Discuss three...
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![The M. M. Pod Company is a retail chain that specializes in
camping equipment. They carry a special tent designed for high
altitudes. The demand is generally normally distributed at 20 per
week with a standard deviation of 3. The store is open 52 weeks
a year. The cost of each tent is $150 and the holding cost
(including opportunity and physical holding) is 15%. The
ordering cost is $55. The lead time for receiving a shipment of
new tents is 6 weeks and is fairly constant. They only want a 5%
chance of a stockout.
Q1. What is the optimal order quantity?
Q2. What should be the safety stock to be?
Q3. What is the reorder point ?
Q4. What is the average inventory?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F083b3a30-aeda-4635-ab40-6ff1e9841986%2F446c6e9f-0dc4-4396-a5ab-f79ee866636f%2Ft6dqcw_processed.png&w=3840&q=75)
Transcribed Image Text:The M. M. Pod Company is a retail chain that specializes in
camping equipment. They carry a special tent designed for high
altitudes. The demand is generally normally distributed at 20 per
week with a standard deviation of 3. The store is open 52 weeks
a year. The cost of each tent is $150 and the holding cost
(including opportunity and physical holding) is 15%. The
ordering cost is $55. The lead time for receiving a shipment of
new tents is 6 weeks and is fairly constant. They only want a 5%
chance of a stockout.
Q1. What is the optimal order quantity?
Q2. What should be the safety stock to be?
Q3. What is the reorder point ?
Q4. What is the average inventory?
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