Question: The demand for barbecue grills has been fairly large in the past several years, and Home Supplies, Inc., usually orders new barbecue grills five times a year. It is estimated that the ordering cost is $60 per order. The carrying cost is $10 per grill per year. Furthermore, Home Supplies, Inc., has estimated that the stockout cost is $30 per unit. The ROP is 650 units. Although the demand each year is high, it varies considerably. The demand during the lead time is shown in the following table:

The lead time is 12 working days. How much safety stock should Home Supplies, Inc., maintain?

6.42 Georgia Products offers the following discount schedule for its 4-by-8-foot sheets of good-quality wood:

9 sheets or less 18.00

10 to 50 sheets 17.50

More than 50 sheets 17.25

Home Sweet Home Company orders plywood from Georgia Products. Home Sweet Home has an ordering cost of $45. The carrying cost is 20%, and the annual demand is 100 sheets. What do you recommend?

Price: $2.99

Solution: The downloadable solution consists of 2 pages
Deliverable: Word Document