Assignment:
In the transportation problem below, the data in the cells are profits per units shipped. The objective of the company is profit maximization. Find the best shipment schedule(s).
|
To
From
|
R
|
S
|
Supply
|
|
A
|
6
|
4
|
60
|
|
B
|
3
|
5
|
100
|
|
C
|
7
|
2
|
80
|
|
Demand
|
60
|
150
|
|
Q2. (i) A company uses 5,120 bolts during the course of the year, and the usage is relatively
Constant throughout the year. These bolts are purchased for £2 each, and the lead time is 3 days. The holding cost per bolt per year is 10% of unit cost and the ordering cost per order is £12.5. There are 256 working days per year for this business.
a) What is EOQ?
b) Given the EOQ, what is the average inventory?
c) In minimizing cost, how many orders would be made each year? What would be the annual ordering cost?(do not round off your answer)
d) Given the EOQ, what is the total annual inventory cost ( including purchase cost)
e) What is the time between orders?
f) What is the ROP(re-order point)?
(ii) After analyzing the cost of various options for obtaining bolts, the company recognizes that ,Although the lead time is 3 days, the demand during lead time often varies. The company has kept very careful records and has determined that lead time is normally distributed with a standard deviation of 1.2 unit.
a) What Z value would be appropriate for a 95% service level?
b) What safety stock should the company maintain if it wants a 95% service level?
c) What is the adjusted ROP for the bolts?
Your answer must be typed, double-spaced, Times New Roman font (size 12), one-inch margins on all sides, APA format and also include references.