Sam's hardware store has an order policy of ordering 12 gallons of a specific primer whenever 7 gallons are on hand (unless there's already an ordered delivery due). The store would like to see how well their policy works
Assume that beginning inventory in period 1 is 10 gallons and that orders are placed at the end of the week to be received one week later. (In other words, if an order is placed at the end of week one, it is available at the beginning of week 3.) Assume that if inventory is not on hand, it will result in a lost sale. The weekly demand distribution obtained from past sales is found in the table below. Also, use the random numbers that are provided and simulate 10 weeks' worth of sales. How many sales are lost?
Weekly sales Probability
3 .20
4 .30
5 .20
6 .20
Random numbers for sales: 37, 60, 79, 21, 85, 71, 48, 39, 31, 35
Weekly sales Probability RN
assignment
3 .20 01-20
4 .30 21-50
5 .20 51-70
6 .20 71-90
7 .10 91-00
Week Order received Beginning inventory RN Sales Ending inventory Order? Lost sales
1 10 37 4 6 Y
2 6 60 5 1
3 12 13 79 6 7 Y
4 7 21 4 3
5 12 15 85 6 9
6 9 71 6 3 Y
7 3 48 4 0 1
8 12 12 39 4 8
9 8 31 4 4 Y
10 4 35 4 0
Over the 10 weeks only 1 gallon of sales is lost.
You might also like to view...
Answer the following statements true (T) or false (F)
1.Assume that the United States and Canada engage in trade. If the international terms of trade coincides with the U.S. cost ratio, the United States realizes all of the gains from trade with Canada. 2.Assume that the United States and Canada engage in trade. If the international terms of trade coincides with the Canadian cost ratio, the United States realizes all of the gains from trade with Canada 3.If the international terms of trade lies beneath (inside) the Mexican cost ratio, Mexico is worse off with trade than without trade. 4.Although J. S. Mill recognized that the region of mutually beneficial trade is bounded by the cost ratios of two countries, it was not until David Ricardo developed the theory of reciprocal demand that the equilibrium terms of trade could be determined. 5.According to J. S. Mill, if we know the domestic demand expressed by both trading partners for both products, the equilibrium terms of trade can be defined.
Which of the following is an inventory valuation method?
A) First-in, first-out B) Average-cost C) Lower-of-cost-or-market D) Perpetual
Many times, clients will shift new people into the project who have no experience with it as they move their key people to new challenges. This issue is:
A) An emotional one for the project team. B) An emotional one for the clients. C) One that is internal and intellectual. D) One that is external and intellectual.
The term multinational corporation is used to describe a firm that operates in two or more countries.?
Answer the following statement true (T) or false (F)