Production and Operations Analysis, Seventh Edition
7th Edition
ISBN: 9781478623069
Author: Steven Nahmias, Tava Lennon Olsen
Publisher: Waveland Press, Inc.
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Question
Chapter 5.6, Problem 21P
Summary Introduction
Interpretation:
Number of cards to be printed if 90% is probability and 97% is probability.
Concept Introduction:
Cumulative distribution function is a probability function in which probability is calculated that the variable takes less than or equal to x.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Consider a toy retailer with warehouses in St. Louis and Kansas City, Missouri. The warehouses stock an identical popular toy delivered to stores in the two cities. Assume a warehouse serves only stores in its city. Weekly demand for St. Louis is normally distributed with mean 2,000, and standard deviation 400 (that is N(μ = 2,000, σ = 400)). Weekly demand for KansasCity is distributed N(μ = 2,000, σ = 300). We assume that the two cities are far enough apart so that demand in the two cities is independent.The following parameters are seen by both warehouses:Replenishment lead time in weeks ~ N(μ = 2, σ = 0.1);Fixed shipping cost of replenishment: $500;Cost per toy: $10; andHolding cost per toy 20 percent of toy’s value per year.How many toys should each location order at a time and when should they reorder if they want a 99 percent cycle service level? What if they pool the two locations?
A retail outlet sells a seasonal product for $10 per unit. The cost of the product is $8 per unit. All units not sold during the regular season are sold for half the retail price in an end-of-season clearance sale. Assume that demand for the product is uniformly distributed between 200 and 800.
What is the recommended order quantity?
What is the probability that at least some customers will ask to purchase the product after the outlet is sold out? That is, what is the probability of a stock-out using your order quantity in part (a)?
To keep customers happy and returning to the store later, the owner feels that stock-outs should be avoided if at all possible. What is your recommended order quantity if the owner is willing to tolerate a 0.15 probability of a stock-out?
Alfa Inc. uses a 2-week periodic review for its notebook store
inventory. Mean and standard deviation of weekly sales are 16
and 5 respectively. The lead time is 3 days. The mean and
standard deviation of lead-time demand are 8 and 3.5
respectively.
1.What is the mean and standard deviation of demand during the
review period plus the lead-time period?
2.Assuming that the demand has a normal probability
distribution, what is the replenishment level that will provide an
expected stockout rate of one per year?
3.lf there are 18 notebooks in the inventory, how many
notebooks should be ordered?
Chapter 5 Solutions
Production and Operations Analysis, Seventh Edition
Ch. 5.2 - Prob. 1PCh. 5.2 - Prob. 2PCh. 5.2 - Prob. 4PCh. 5.3 - Prob. 7PCh. 5.3 - Prob. 9PCh. 5.3 - Prob. 12PCh. 5.5 - Prob. 16PCh. 5.5 - Prob. 18PCh. 5.6 - Prob. 21PCh. 5.7 - Prob. 24P
Ch. 5.7 - Prob. 25PCh. 5.7 - Prob. 26PCh. 5.7 - Prob. 27PCh. 5 - Prob. 28APCh. 5 - Prob. 31APCh. 5 - Prob. 32APCh. 5 - Prob. 33APCh. 5 - Prob. 37APCh. 5 - Prob. 38APCh. 5 - Prob. 40APCh. 5 - Prob. 41APCh. 5 - Prob. 43APCh. 5 - Prob. 44APCh. 5 - Prob. 45APCh. 5 - Prob. 46APCh. 5 - Prob. 47APCh. 5 - Prob. 48APCh. 5 - Prob. 49APCh. 5 - Prob. 50APCh. 5 - Prob. 51AP
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, operations-management and related others by exploring similar questions and additional content below.Similar questions
- Assume the demand for a companys drug Wozac during the current year is 50,000, and assume demand will grow at 5% a year. If the company builds a plant that can produce x units of Wozac per year, it will cost 16x. Each unit of Wozac is sold for 3. Each unit of Wozac produced incurs a variable production cost of 0.20. It costs 0.40 per year to operate a unit of capacity. Determine how large a Wozac plant the company should build to maximize its expected profit over the next 10 years.arrow_forwardSix months before its annual convention, the American Medical Association must determine how many rooms to reserve. At this time, the AMA can reserve rooms at a cost of 150 per room. The AMA believes the number of doctors attending the convention will be normally distributed with a mean of 5000 and a standard deviation of 1000. If the number of people attending the convention exceeds the number of rooms reserved, extra rooms must be reserved at a cost of 250 per room. a. Use simulation with @RISK to determine the number of rooms that should be reserved to minimize the expected cost to the AMA. Try possible values from 4100 to 4900 in increments of 100. b. Redo part a for the case where the number attending has a triangular distribution with minimum value 2000, maximum value 7000, and most likely value 5000. Does this change the substantive results from part a?arrow_forwardUse @RISK to analyze the sweatshirt situation in Problem 14 of the previous section. Do this for the discrete distributions given in the problem. Then do it for normal distributions. For the normal case, assume that the regular demand is normally distributed with mean 9800 and standard deviation 1300 and that the demand at the reduced price is normally distributed with mean 3800 and standard deviation 1400.arrow_forward
- The weekly demand of a slow-moving product has the probability mass function shown to the right. Find the expected value, variance, and standard deviation of weekly demand. The expected value of weekly demand is 1 (Type an integer or a decimal. Do not round.) The variance of weekly demand is 6. (Type an integer or a decimal. Do not round.) The standard deviation of weekly demand is (Round to three decimal places as needed.) Demand, x Probability, f(x) 0.3 0.2 IT 0.4 0.1 0.0 4 or morearrow_forwardA book and paper store distributes one specialized monthly magazine. When looking at the sales the last years, they have concluded that the demand for each issue of the magazine will be normally distributed with an expected sale of 250 and a standard deviation of 100. The purchase price for the magazine is $20. and the sales price is $50.The store has an agreement with a second -hand store that buys unsold magazines for $5 each. How many magazines should the store buy of each issue?arrow_forwardConsider a two-tier supply chain with one manufacturer and one retailer whointeract in a single selling season. The manufacturer sells a product to the retailer, who in turn sells in the market. Demand E is uncertain with cumulative distribution function F (·)and probability density function f (·). Since the production lead time is much longer thanthe selling season, the retailer must place a single order before demand is realized and cannotreplenish her inventory during the season. The retailer sells the product at an exogenousand fixed retail price r. The manufacturer produces the product at a unit cost of c. Themanufacturer uses a linear sales rebate contract and determines the following contract terms:For each unit ordered, he charges the retailer a wholesale price w, and for each unit sold, hepays the retailer a rebate s. Assume that the product has zero salvage value at the end ofthe season, and the inventory holding cost during the season is…arrow_forward
- Why distribution range negative infinity to positive infinity is transformed to zero to positive infinity? ( probability distribution)arrow_forwardSuppose that the manager of a construction supply house determined from historical recordsthat demand for sand during lead time averages 50 tons. In addition, suppose the managerdetermined that demand during lead time could be described by a normal distribution thathas a mean of 50 tons and a standard deviation of 5 tons. Answer these questions, assumingthat the manager is willing to accept a stockout risk of no more than 3 percent:a. What value of z is appropriate?arrow_forwardThe purpose of this assignment is to know how to apply normal probability distribution concepts to a real business case. The case study starts under Unit 4. and Unit 4.1 is the continuation. Describe a normal probability distribution that can be used to approximate the demand distribution. Sketch the distribution and show its mean and standard deviation. Compute the probability of a stock-out for the order quantities suggested by members of management team.arrow_forward
- Dan’s Independent Book Store is trying to decide on how many copies of a book to purchase at the start of the upcoming selling season. The book retails for $28.00. The publisher sells the book to Dan at $20.00. Dan can dispose of all of the unsold copies of the book at 50% off the retail price, at the end of the season. Dan estimates that demand for this book during the season is Normal with a mean of 1000 and a standard deviation of 250. Question 1: What is the quantity that Dan should order to maximize his expected profit?arrow_forwardThe retail price of a Mother’s Day cake in San Ramon Safeway is $30.00. A local bakery sells the cakes to the Safeway at $20.00. The Safeway will dispose of all of the unsold cakes at 50% off the retail price, at the end of the Mother’s Day weekend. The manager in Safeway estimates that demand for this cake during the Mother’s Day weekend is Normal Distribution with a mean of 100 cakes and a standard deviation of 50 cakes. (1) How many cakes should San Ramon Safeway order from the bakery? (2) If the store manager learned a new forecast method in a class that would reduce the standard deviation of estimated demand from 50 to 25 (mean remains 100), how many cakes should San Ramon Safeway order from the local bakery?arrow_forwardYour County has asked you to analyze the purchase of some dump trucks. Each truck wil cost $45,000 and have an operating and maintaining cost that starts at $15,000 the first year and increases by $ 2,000 per year. Assume the salvage value at the end of year is $9,000 and the interest rate is 12%. Estimate the equivalent annual cost of each truck.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Practical Management ScienceOperations ManagementISBN:9781337406659Author:WINSTON, Wayne L.Publisher:Cengage,
Practical Management Science
Operations Management
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:Cengage,
Single Exponential Smoothing & Weighted Moving Average Time Series Forecasting; Author: Matt Macarty;https://www.youtube.com/watch?v=IjETktmL4Kg;License: Standard YouTube License, CC-BY
Introduction to Forecasting - with Examples; Author: Dr. Bharatendra Rai;https://www.youtube.com/watch?v=98K7AG32qv8;License: Standard Youtube License