Lake Grove Confectioneries (LGC) produces special edition ch…
Lake Grove Confectioneries (LGC) produces special edition chocolates for the holiday season, sold in custom-designed boxes. The company currently offers two designs, and all packaging takes place in the factory where the chocolates are made. All manufacturing and packaging for the holiday season is completed before it begins. Demand forecasts for Designs A and B are normally distributed and independent of each other. Design A has a mean of 20,000 and a standard deviation of 400. Design B has a mean of 10,000 and a standard deviation of 300. Each box costs $10 to produce and is sold for $20. LCG will sell any unsold boxes remaining at the end of the season at a salvage value of $4 each. LCG is considering separating chocolate production from packaging. The chocolates would be produced before the start of the season and packaged on an express line as orders are received. This would add $3 to the production cost due to the express line and separation of steps. How many boxes would LCG sell at a discounted price if it used postponement? (If necessary, calculate to four decimal places.)
Read DetailsThe retail chain operates twelve stores in the region. These…
The retail chain operates twelve stores in the region. These are supplied by two different suppliers. Each truck has a capacity of 48,000 units, costs $1,200 per load, and an additional $100 per delivery. The cost of holding a unit in inventory at a retailer for one year is 50 cents ($0.5). The vice president of the supply chain is considering using milk runs to deliver to six retailers per truck. Assume that each retailer’s annual demand is 192,000 units. What is the total cost of the milk runs? (If necessary, calculate to four decimal places.)
Read DetailsWeekly demand for phones at B&M is normally distributed, wit…
Weekly demand for phones at B&M is normally distributed, with a mean of 1,500 and a standard deviation of 1,000. The replenishment lead time has a mean of four weeks and a standard deviation of 2 weeks. Assume that the demand is independent from one week to the next. Evaluate the fill rate resulting from the policy of ordering 12,000 phones when there are 7,000 phones in inventory. (If necessary, calculate to four decimal places.)
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