In your role as production planner, you have experienced too many stock outs on one particular item. This item has 308 pints of demand during the lead time and a standard deviation during the lead time of 10.8 pints.

Calculate the Safety Stock assuming a 5% risk level. (Keep two decimal places in your answer which should be a percentage)

2.

Our home construction company still buys nails in 15-pound boxes but now we use an average of 2690 boxes a year. Preparing an order and receiving a shipment of nails involves a cost of $2.35 per order. Annual carrying costs are $1.0 per bag.

What will be their total cost of ordering and carrying the nails? (Include the pennies in your answer)

3.

Our home construction company buys nails in 15-pound boxes. We use an average of 2215 boxes a year. The vendor that makes the nails can produce 33 boxes per day while our usage is 8 boxes per day. It costs $1.60 to place the typical order. Annual carrying costs are $0.20 per box.

What will be our average number of boxes on hand if we order the EOQ bags in each order? (Keep up to two decimal places in your answer)

4.

Management has not been pleased with the number of stockouts for a particular item. This item has 550 pounds of demand during the lead time and a standard deviation during the lead time of 55 pounds.

Calculate the Safety Stock assuming a 4% risk level. (Keep two decimal places in your answer)

5.

A JIT system uses Kanban cards to authorize movement of incoming parts. In one portion of the system, a work center uses an average of 80 parts per hour while running. The manager has assigned an inefficiency factor of 0.18 to the center.

Standard containers are designed to hold 6 dozen parts each. The cycle time for parts containers is 105 minutes.

How many containers are needed?

6.

A manager wants to determine the number of containers to use for incoming parts for a kanban system to be installed next month. The process will have a usage rate of 90 pieces per hour. Because the process is new, the manager has assigned an inefficiency factor of 0.35. Each container holds 7 pieces and it takes an average of 75 minutes to complete a cycle.

How many containers should be used?

7.

You make steering wheels for Tesla using Kanban cards to authorize movement of incoming parts. In one portion of the system, a work center uses an average of 95 parts per hour while running. The manager has assigned an inefficiency factor of 0.24 to the center.

Standard containers are designed to hold 4 dozen parts each. The cycle time for parts containers is 80 minutes.

How many containers are needed?

8.

Each employee takes two 10 minute rest breaks and one 25 lunch break each shift. The company has 2 shifts per work day each with 6 employees.

Compute the takt time for a full day (all shifts) if the company is planning to produce 600 JU-4s.

Note: Keep two decimal places in your answer. The answer is in minutes per JU-4.

9.

The most important inventory item has annual holding costs of $436.00. One method of shipping this item is 5 days faster than the other, but it is $1.25 more per item.

How much more expensive is the slower method compared to the faster method? (Include the pennies in your answer)

A given inventory item has a per-year holding cost of $550.00. One method of shipping this item is 4 days faster than the other, but its shipping cost is $0.50 more per unit.

How much more expensive overall is the slower method compared to the faster method? (Include the pennies in your answer)

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