Question

PA 14.5 A Cold lne is a frozen food distributor with... Whe trike 141 ACold like is a trouven food disbbutor with 10 warthouthi across the courlty Ivan fory, ore of the warehouse s normaly distroubed with a mean of 384 and a wandard deviation of thi Since ACoid orders at least one. truck from the sepples each day. ACold can esaentally order any quanty of CF P if warts each doy let tact. NCoiss compehter sydem is Gesgned to implement an order-up to pokcy for each product luan notes that ary order for CFF- amtives 5 darys aftes the onder Suppose an order up-la level at 2404 is whed What is the expected gn hand bventary? 3. Use Tabie 141 and reund to neacest integer b. Suppere an ordecioblolevel of 2547 is used What is the expecticd on-order imventory? b. Round your answet to the nearent integer c. Scepese an ander up-to level at 2031 is used What is the an stock probability? Use A. Sluppose ACold warts a 094 in-stock probahity. What should the oxder-up-to keyel be? A. Use Table 141. Round your answer do the nearest integer

PA 14-5 A Cold Inc is a frozen food distributor with... Use Table 141. ACold inc is a frozen food distributor with 10 warehouses across the country Ivan Tory, one of the warehouse: managers, warts to make sure that the inventory poticies used by the warehouse are minimizing inventory While still maintaining quick delivery to ACold's customers. Since the warehouse camies hundreds of different products, Ivan decided to study one. He picked Caruso's Frozen Pizza (CFP) Average daily demand for CFPs is normally distributed with a mean of 384 and a standard deviation of 157 Since ACold orders at least one truck from their supplier each day. ACold can essentially order any quantity of CFP it wants each day In fact. Acold's computer system is designed to implement an order-up-to poticy for each product. fvan notes that any order for CFPs arrives 5 days after the order. a. Suppose an order-up to level of 2404 is used What is the expected on-hand inventory? a. Use Table 14.1 and round to nearest integer b. Suppose an order-up-to level of 2547 is used What is the expected on-order miventory? b. Round your answer to the nearest integer. Suppose an order-up-to level of 2031 is used. What is the in-stock probnbility? Use c. Table 14.1 Round your answer to one decimal d. Suppose ACold wants a 0.94 in-stock probability. What should the order-up-to level be? d. Use Table 14.1. Round your answer to the nearest integer

Answer 1

The expected on-hand inventory, expected on-order inventory, in-stock probability, and order-up-to-level for specific scenarios can be calculated using formulas and given data. The expected on-hand inventory is the order-up-to level minus the average daily demand. The expected on-order inventory is the average daily demand minus the order-up-to level. The in-stock probability is calculated by dividing the difference between the order-up-to level and the average daily demand by the standard deviation of daily demand. The order-up-to level can be determined by adding the product of the z-score and the standard deviation of daily demand to the average daily demand.

Step-by-step explanation:

The expected on-hand inventory can be calculated using the formula:

Expected on-hand inventory = order-up-to-level - average daily demand

For an order-up-to level of 2404, the expected on-hand inventory = 2404 - 384 = 2020.

The expected on-order inventory can be calculated using the formula:

Expected on-order inventory = average daily demand - order-up-to-level

For an order-up-to level of 2547, the expected on-order inventory = 384 - 2547 = -2163.

The in-stock probability can be calculated using the formula:

In-stock probability = (order-up-to level - average daily demand) / standard deviation of daily demand

For an order-up-to level of 2031, the in-stock probability = (2031 - 384) / 157 = 11.64%.

The order-up-to level can be calculated using the formula:

Order-up-to level = average daily demand + (z-score * standard deviation of daily demand)

For an in-stock probability of 0.94, the order-up-to level = 384 + (1.75 * 157) = 660.75. Rounded to the nearest integer, the order-up-to level should be 661.