Problem Asmt
Inventory Control
(Total points: 15)
Problem 1:
JillàJob Shop buys the following Part (X-123) for use in its production system. The parts
are needed throughout the entire 52-week year. Data for the part are as follows:
ITEM
Annual demand
Holding cost per unit per
year
Order cost
Lead time
Safety stock
X-123
10,000
$4
$300
4 weeks
100 units
Item cost
$10.00
a) Compute the optimal order quantity. (3 points)
b) What is the reorder point for X-123? (2 points)
Problem 2:
BenjiàBar and Restaurant uses 5,000 quart bottles of an imported wine each year.
Weekly demand is 100 bottles (closed two weeks per year) with a standard deviation of
30 bottles. The wine costs $3 per bottle and is served only in whole bottles because it
loses its bubbles quickly. Benji figures that it costs $10 each time an order is placed, and
holding costs are 20 percent of the purchase price. It takes four weeks for an order to
arrive.
Benji would like to use an inventory system (Fixed – Order Quantity model) that
minimizes inventory cost and will provide a 95 percent service probability.
At what inventory level (reorder point) should he place an order? (5 points)
Problem 3:
UDI Pharmaceuticals orders its antibiotics every three weeks (21 days) when a
salesperson visits from one of the Pharmaceutical companies. Tetracycline is one of its
most prescribed antibiotics, with average daily demand of 2,000 capsules. The standard
deviation of daily demand was derived from examining prescriptions filled over the past
three months and was found to be 400 capsules. It takes four days for the order to
arrive.
UDI uses Fixed ime Period Model. UDI would like to satisfy 95 percent of the
prescriptions. The salesperson just arrived, and there are currently 20,000 capsules in
stock. How many capsules should be ordered? (5 points)
Problem Assignment (Project Management)
(Total points: 10)
Activity
A
B
C
D
E
F
G
H
Immediate
Predecessor
A
A
B
C ,D
D
F
E, G
(Time Weeks)
1
4
4
2
5
2
2
3
a) Identify critical path (3 points)
b) How many weeks will it take to complete the project? (2 points)
c) Which activities have slack, and how much? (5 points)

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