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Final Exam: DISC 333 (Part 2)

1. The economic order quantity for bars of soap is 2587 bars. This is calculated using the formula sqrt(2*demand*order cost/holding cost per year). 2. The reorder point to maintain a 99% cycle service level is 2035 bars. This is calculated as demand*lead time + safety stock, where safety stock is the z-value corresponding to 99% (2.33) multiplied by the standard deviation of demand and lead time. 3. Management should order 2587 bars of soap and trigger a reorder when inventory drops to 2035 bars to maintain high cycle service level while minimizing ordering and holding costs.

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Ahsan Ishtiaq
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50 views11 pages

Final Exam: DISC 333 (Part 2)

1. The economic order quantity for bars of soap is 2587 bars. This is calculated using the formula sqrt(2*demand*order cost/holding cost per year). 2. The reorder point to maintain a 99% cycle service level is 2035 bars. This is calculated as demand*lead time + safety stock, where safety stock is the z-value corresponding to 99% (2.33) multiplied by the standard deviation of demand and lead time. 3. Management should order 2587 bars of soap and trigger a reorder when inventory drops to 2035 bars to maintain high cycle service level while minimizing ordering and holding costs.

Uploaded by

Ahsan Ishtiaq
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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Final Exam: DISC 333 (Part 2)

Name Ahsan ishtiaq


Roll number 22110033

Time 45 min
Date 27-Dec-21

You are required to solve all (three) questions and upload ans
Late submissions and submissions via ema
SC 333 (Part 2)

stions and upload answers in designated folder on LMS by 16:25


submissions via email won't be entertained
HO 1 2 3 4 5
HO 0
1 8.8 0
2 9.1 10.8 0
3 12.9 13.7 11.8 0
4 14.4 8.2 5.1 8.7 0
5 8 10.8 13.3 9.5 11.6 0
6 10.5 10 3.8 15.1 7.4 6.9
7 13.4 4.4 7.1 14 9.4 6.5
8 14 8.4 2.8 18.2 14.7 0.75

Compute route sequence for route 1 using farthest insert method from distance matrix
given above
.
Route 1 locations:
3,5,7,8
Direct answers without any working will not be accepted. Explain/show your
workings as given in the technical note.

dc-3-dc 25.8 dc-5-dc 16


dc-7-dc 26.8 dc-8-dc 28

dc-8-3-dc 45.1 dc-8-7-dc 33.7


dc-8-5-dc 22.75

dc-5-8-3- 39.85 dc-8-3-7-5-dc 60.7 dc-5-8-3-7-dc


dc-8-3-5- 49.7
dc-8-3-7- 59.6
dc-7-8-3- 50.8
6 7 8

0
9.9 0
4.7 6.3 0

om distance matrix

show your

The sum is calculated manually using calculator because of lack of time


One calcuation(first) in each iteration is donein cells using excel to show how I have done

54.35
of lack of time
g excel to show how I have done it
Use the following distance matrix to recommend the route
sequence to be used for Route 1. The locations covered are given
below.
The route sequence should be given for the following nearest
neighbour method: HO
1
2
Direct answers without any working will not be accepted. 3
Explain/show your workings as given in the technical note. 4
5
6
7
8
9
10

Locations to
be covered
1
3 dc-1-dc 14.4
4 dc-3-dc 19.2
6 dc-4-dc 38.8
dc-6-dc 8.8

dc-6-1-3-dc 22.9
dc-6-1-4-dc 40.1
dc-3-6-1-dc 24.8
dc-4-6-1-3-d 46.4
Distance Matrix
HO 1 2 3 4 5 6 7
0
7.2 0
6.3 4.8 0
9.6 4.7 7.4 0
19.4 12.1 17.2 9.1 0
12.1 12.8 14.6 15.7 22.1 0
4.4 4.2 2.7 6.6 15.6 12.7 0
3.7 9.2 7.8 11.5 20.8 13.7 4.9 0
3.4 7 7.8 10.7 19.2 8.7 5.8 6.8
8.4 10.4 5.7 12 22.1 18.4 7.6 5.4
13.4 16.6 17.2 18.7 25.3 3.3 16.3 15.6

dc-6-1-dc 15.8
dc-6-3-dc 20.6
dc-6-4-dc 39.4 all formulas are applied in cells

dc-4-6-1-3-d 53.5
dc6-1-3-4-d 22.4
8 9 10

0
9.9 0
10.1 21 0

all formulas are applied in cells


The Whispering Pines is a popular 500-room hotel in the North Woods. Managers need to keep close tabs on all ro
demand for the soap is 275 bars, with a standard deviation of 30 bars. Ordering cost is $10 and the inventory hold
a standard deviation of 1 day. The lodge is open 365 days a year.

1 What is the economic order quantity for the bar of soap?


2 What should the reorder point be for the bar of soap if management wants to have a 99 percent cycle-

D=275*365 gives 100375 bars


S=10
H=0.3

sqrt(2(100375)(10)/0.3)

Sqrt(6691666.7)
2587 soaps approximately
d to keep close tabs on all room service items, including a special pine-scented bar soap. The daily
$10 and the inventory holding cost is $0.30/bar/year. The lead time from the supplier is 5 days, with

to have a 99 percent cycle-service level? (z value for 99% service level corresponds to 2.33)

b) D=275
std(d)=30
L=5
std(lt)=1

sigma (dlt)=sqrt(L*std(d)^2 + (D^2)*(std(lt)^2)


sqrt(5(30)^2 + (275)^2 *(1^2))
283.06 bars
saftey stock = z*sigm (dlt)= (2.33)(283.06)
659.5 or 660 bars
reorder point= DL+safety stock
(275)(5)+660=2035 bars

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