Business, 03.08.2020 14:01, mazielynn84

ACold Inc. Is a frozen-food distributor with 10 warehouses across the country. Ivan Tory, one of the warehouse managers, wants to make sure that the inventory policies used by the warehouse are minimizing inventory while still maintaining quick delivery to ACold's customers. Because the warehouse carries hundreds of different products, Ivan decided to study one. He picked Caruso's Frozen Pizza (CFP). Demand for CFPs averages 400 per day with a standard deviation of 152. Because ACold orders at least one truck from its 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 policy for each product. Ivan notes that any order for CFPs arrives four days after the order.

Answers: 3

Show answers

Answers

Suppose it uses an order up to level of 2410. What is its expected on-hand inventory?

The expected Inventory on -hand = 429.074

Explanation:

From the given information;

Mean i,e Demand for CFPs averages = 400 per day

standard deviation = 152

Lead TIme = 4 days

period length = ACold Inc. orders at least one truck from its supplier each day,

Let consider the fact that the order is up to level of S = 2410

Then, the expected demand for the lead time is;

$\mu$ = Demand × (Lead time + period length)

$\mu$ = 400 × ( 4 + 1)

$\mu$ = 400 × 5

$\mu$ = 2000

the standard deviation for the lead time as well is :

$\sigma$ = standard deviation sd $\sqrt{lead \ time \times period \ length }$

$\sigma$ = $152 \sqrt{4+1}$

$\sigma$ = $152 \sqrt{5}$

$\sigma$ = 339.88

The z - value for the test statistics can now be computed as:

$z = \dfrac{X - \mu}{\sigma}$

$z = \dfrac{2410 - 2000}{339.88}$

$z = \dfrac{410}{339.88}$

z = 1.2063

z = 1.21

The order upto level = Inventory on -hand + Inventory order - Backorders

The order upto level - Inventory order + Backorders = Inventory on -hand

Inventory on -hand = The order upto level - Inventory order + Backorders

where ;

the backorders = $\sigma L(z)$ and L(z) = standard loss

From the tables of distribution function and inventory function for standard normal distribution function

L(z) = 0.0561

the backorders can now be = 340 × 0.0561

the backorders can now be = 19.074

Recall that :

Inventory on -hand = The order upto level - Inventory order + Backorders

consider the fact that the order is up to level of S = 2410

∴ Inventory on -hand = 2410 - 2000 + 19.074

Inventory on -hand = 410 + 19.074

Inventory on -hand = 429.074

answered: Guest

Where are the choices.

answered: Guest

1. salary 2. i’m not sure

Other questions on the subject: Business

Business, 21.06.2019 14:30, savannahvargas512

John f. kennedy believed that a leader should be elected successful a lifelong student in the military

Answers: 3

continue

Business, 22.06.2019 02:30, maddielr17

Acompany using the perpetual inventory system purchased inventory worth $540,000 on account with credit terms of 2/15, n/45. defective inventory of $40,000 was returned 2 days later, and the accounts were appropriately adjusted. if the company paid the invoice 20 days later, the journal entry to record the payment would be

Answers: 1

continue

Business, 22.06.2019 03:00, jamesgotqui6

Presented below is a list of possible transactions. analyze the effect of the 18 transactions on the financial statement categories indicated. transactions assets liabilities ownersâ€™ equity net income 1. purchased inventory for $80,000 on account (assume perpetual system is used). 2. issued an $80,000 note payable in payment on account (see item 1 above). 3. recorded accrued interest on the note from item 2 above. 4. borrowed $100,000 from the bank by signing a 6-month, $112,000, zero-interest-bearing note. 5. recognized 4 monthsâ€™ interest expense on the note from item 4 above. 6. recorded cash sales of $75,260, which includes 6% sales tax. 7. recorded wage expense of $35,000. the cash paid was $25,000; the difference was due to various amounts withheld. 8. recorded employerâ€™s payroll taxes. 9. accrued accumulated vacation pay. 10. recorded an asset retirement obligation. 11. recorded bonuses due to employees. 12. recorded a contingent loss on a lawsuit that the company will probably lose. 13. accrued warranty expense (assume expense warranty approach). 14. paid warranty costs that were accrued in item 13 above. 15. recorded sales of product and related service-type warranties. 16. paid warranty costs under contracts from item 15 above. 17. recognized warranty revenue (see item 15 above). 18. recorded estimated liability for premium claims outstanding.

Answers: 1

continue

Business, 22.06.2019 10:00, Randomkid0973

University car wash built a deluxe car wash across the street from campus. the new machines cost $219,000 including installation. the company estimates that the equipment will have a residual value of $19,500. university car wash also estimates it will use the machine for six years or about 12,500 total hours. actual use per year was as follows: year hours used 1 3,100 2 1,100 3 1,200 4 2,800 5 2,600 6 1,200 prepare a depreciation schedule for six years using the following methods: 1. straight-line. 2. double-declining-balance. 3. activity-based.

Answers: 1

continue

Do you know the correct answer?

ACold Inc. Is a frozen-food distributor with 10 warehouses across the country. Ivan Tory, one of the...