Quantitative Methods Final

26 days

The Krewe of Orpheus maintains a supply of swizzle sticks for events throughout the year. Demand for swizzle sticks is shockingly low, a quick check of krewe records from last year reveals that they used only 585,000, but the krewe president believes that they should be good stewards of what they have, so they seek to manage this inventory using the EOQ policy, although they prefer to refer to it as an EOKrewe policy for obvious reasons. Swizzle sticks are not expensive items, they cost a nickel apiece largely due to the club logo printed on each one. This also serves to increase the lead time as they can't be obtained from a standard restaurant supply house. Instead, they must be ordered with an eye towards the six day lead time. It costs $15 to place an order, most of this cost is a result of explaining the meaning of "Laissez les bons temps rouler" and why it should be printed on the edge of each swizzle stick. Holding cost is 20% of purchase price. How much time passes between orders if they order optimally (in accordance with the EOQ policy)?

20946

The Krewe of Orpheus maintains a supply of swizzle sticks for events throughout the year. Demand for swizzle sticks is shockingly low, a quick check of krewe records from last year reveals that they used only 585,000, but the krewe president believes that they should be good stewards of what they have, so they seek to manage this inventory using the EOQ policy, although they prefer to refer to it as an EOKrewe policy for obvious reasons. Swizzle sticks are not expensive items, they cost a nickel apiece largely due to the club logo printed on each one. This also serves to increase the lead time as they can't be obtained from a standard restaurant supply house. Instead, they must be ordered with an eye towards the six day lead time. It costs $15 to place an order, most of this cost is a result of explaining the meaning of "Laissez les bons temps rouler" and why it should be printed on the edge of each swizzle stick. Holding cost is 20% of purchase price. What is the average inventory if they order at their EOKrewe quantity?

41892

The Krewe of Orpheus maintains a supply of swizzle sticks for events throughout the year. Demand for swizzle sticks is shockingly low, a quick check of krewe records from last year reveals that they used only 585,000, but the krewe president believes that they should be good stewards of what they have, so they seek to manage this inventory using the EOQ policy, although they prefer to refer to it as an EOKrewe policy for obvious reasons. Swizzle sticks are not expensive items, they cost a nickel apiece largely due to the club logo printed on each one. This also serves to increase the lead time as they can't be obtained from a standard restaurant supply house. Instead, they must be ordered with an eye towards the six day lead time. It costs $15 to place an order, most of this cost is a result of explaining the meaning of "Laissez les bons temps rouler" and why it should be printed on the edge of each swizzle stick. Holding cost is 20% of purchase price. What should the order quantity for swizzle sticks be?

$418.93

The Krewe of Orpheus maintains a supply of swizzle sticks for events throughout the year. Demand for swizzle sticks is shockingly low, a quick check of krewe records from last year reveals that they used only 585,000, but the krewe president believes that they should be good stewards of what they have, so they seek to manage this inventory using the EOQ policy, although they prefer to refer to it as an EOKrewe policy for obvious reasons. Swizzle sticks are not expensive items, they cost a nickel apiece largely due to the club logo printed on each one. This also serves to increase the lead time as they can't be obtained from a standard restaurant supply house. Instead, they must be ordered with an eye towards the six day lead time. It costs $15 to place an order, most of this cost is a result of explaining the meaning of "Laissez les bons temps rouler" and why it should be printed on the edge of each swizzle stick. Holding cost is 20% of purchase price. Purchase price is .05 per stick, so the holding cost is .05(.2) = .01. What is their total inventory policy cost (excluding cost of goods) if they order at their EOKrewe amount?

EOQ with Noninstantaneous Receipt

The diagram above represents which type of inventory model?

more than 500 units.

The economic production quantity is 500 units (units are delivered to the user department as they come off the production line). If the firm decides to buy this item from an outside supplier rather than producing it, the economic purchase quantity would probably be (assume that inventory costs of production and purchasing an item are the same):

.30

The following data represents quarterly sales of lawnmowers. Year Quarter 1 Quarter 2 Quarter 3 Quarter 4 1 150 140 190 165 2 160 148 210 175 What is the seasonal index for the third quarter? (Round to the nearest hundredth.)

order receipt period.

The interval labeled "D" in the diagram is:

production cycle.

The interval labeled "E" in the diagram is:

6769.

The manager of "Skis 4 U" is preparing a forecast for February of 2010. Demand exhibits both trend and seasonality. The trend equation for monthly demand is y = 4375 + 80t, where t = 1 for January 2009. The seasonal index for February is 1.25. The forecast for February is:

timing and quantity of orders.

The purpose of inventory management is to determine:

production rate

The slope of the line labeled "A" in the diagram is:

production rate minus rate of inventory demand.

The slope of the line labeled "B" in the diagram is:

rate of inventory demand.

The slope of the line labeled "C" in the diagram is:

increases.

When using the EOQ Formula with noninstantaneous production, as the demand rate (D) increases up to the rate of production, the EOQ:

.01

Which of the following possible values of alpha would cause exponential smoothing to respond the most slowly to sudden changes in forecast errors?

Moving averages

________ are good for stable demand with no pronounced behavioral patterns.

Time series

________ is a category of statistical techniques that uses historical data to predict future behavior.

Linear trend

________ is a linear regression model relating demand to time.

MAPD

________ is absolute error as a percentage of demand.

Forecast error

________ is the difference between the forecast and actual demand.

Time series

________ methods assume that what has occurred in the past will continue to occur in the future.

Longer-period, shorter-period

________ moving averages react more slowly to recent demand changes than do ________ moving averages.

trend

A ________ is a gradual, long-term, up-or-down movement of demand.

cyclical pattern

A ________ is an up-and-down repetitive movement that repeats itself over a time span of more than 1 year.

Average inventory level decreases.

A firm is currently purchasing an item for inventory using the basic EOQ model. They plan on making the product themselves and will be using the EOQ model based on noninstantaneous receipt of inventory. If everything else stays the same, what changes should the firm expect?

110

A keyboard costs $1000, and the annual holding cost is 25% of the price of the keyboard. Annual demand is 10,000 units, and the order cost is $150 per order. What is the approximate economic order quantity?

59.55

A rendering plant wishes to use the data (sales records from a few local businesses and the month of the year) to help determine their supply level for the coming months. The records shown in the table provide an excellent opportunity for you to assist them with their forecasting. Month Sales Pounds January 45 54.3 February 57 63.8 March 32 39.5 April 44 49.8 May 51 52.3 June 34 39.9 Using 1 to represent January, 2 to represent February, and so on, what is the intercept for the regression equation that predicts the pounds of supplies available?

0.92

A rendering plant wishes to use the data (sales records from a few local businesses and the month of the year) to help determine their supply level for the coming months. The records shown in the table provide an excellent opportunity for you to assist them with their forecasting. Month Sales Pounds January 45 54.3 February 57 63.8 March 32 39.5 April 44 49.8 May 51 52.3 June 34 39.9 What is the slope of the regression equation developed when the Sales data are used to predict the Pounds?

25.9

After tallying the receipts for their first year of operation, the owners of the Taco Barn are encouraged. Sales of their artisnal tacos, made from such exotic ingredients as ground beef, cheese, and beans, have been strong and seem to give hope to the coming year. Taco sales by month are shown in the table. Month Sales January 474 February 485 March 501 April 588 May 579 June 673 July 594 August 679 September 608 October 699 November 732 December 732 Armed only with his fingers, the owner decides that the safest forecasting approach is a linear trend line. Generate a forecast for the year using this technique and then calculate forecast errors using MAD. What is the mean absolute deviation for this forecasting approach?

599.3

After tallying the receipts for their first year of operation, the owners of the Taco Barn are encouraged. Sales of their artisnal tacos, made from such exotic ingredients as ground beef, cheese, and beans, have been strong and seem to give hope to the coming year. Taco sales by month are shown in the table. Month Sales January 474 February 485 March 501 April 588 May 579 June 673 July 594 August 679 September 608 October 699 November 732 December 732 Armed only with his fingers, the owner decides that the safest forecasting approach is a linear trend line. His fingers are aching by the time he reaches May and he is worried about his ability to stuff tacos during tomorrow's dinner rush. Help him out by finding the forecast for June.

49.1

After tallying the receipts for their first year of operation, the owners of the Taco Barn are encouraged. Sales of their artisnal tacos, made from such exotic ingredients as ground beef, cheese, and beans, have been strong and seem to give hope to the coming year. Taco sales by month are shown in the table. Month Sales January 474 February 485 March 501 April 588 May 579 June 673 July 594 August 679 September 608 October 699 November 732 December 732 Armed only with his fingers, the owner decides that the safest forecasting approach is a moving average of two periods. Generate a forecast for the year using this technique and then calculate forecast errors using MAD. What is the mean absolute deviation for this forecasting approach?

583.5

After tallying the receipts for their first year of operation, the owners of the Taco Barn are encouraged. Sales of their artisnal tacos, made from such exotic ingredients as ground beef, cheese, and beans, have been strong and seem to give hope to the coming year. Taco sales by month are shown in the table. Month Sales January 474 February 485 March 501 April 588 May 579 June 673 July 594 August 679 September 608 October 699 November 732 December 732 Armed only with his fingers, the owner decides that the safest forecasting approach is a moving average of two periods. His fingers are aching by the time he reaches May and he is worried about his ability to stuff tacos during tomorrow's dinner rush. Help him out by finding the forecast for June.

57.9

After tallying the receipts for their first year of operation, the owners of the Taco Barn are encouraged. Sales of their artisnal tacos, made from such exotic ingredients as ground beef, cheese, and beans, have been strong and seem to give hope to the coming year. Taco sales by month are shown in the table. Month Sales January 474 February 485 March 501 April 588 May 579 June 673 July 594 August 679 September 608 October 699 November 732 December 732 Armed only with his fingers, the owner decides that the safest forecasting approach is a weighted moving average using 0.6, 0.3, and 0.1 for the most recent three. Generate a forecast for the year using this technique and then calculate forecast errors using MAD. What is the mean absolute deviation for this forecasting approach?

573.9

After tallying the receipts for their first year of operation, the owners of the Taco Barn are encouraged. Sales of their artisnal tacos, made from such exotic ingredients as ground beef, cheese, and beans, have been strong and seem to give hope to the coming year. Taco sales by month are shown in the table. Month Sales January 474 February 485 March 501 April 588 May 579 June 673 July 594 August 679 September 608 October 699 November 732 December 732 Armed only with his fingers, the owner decides that the safest forecasting approach is a weighted moving average using 0.6, 0.3, and 0.1 for the most recent three. His fingers are aching by the time he reaches May and he is worried about his ability to stuff tacos during tomorrow's dinner rush. Help him out by finding the forecast for June.

49.9

After tallying the receipts for their first year of operation, the owners of the Taco Barn are encouraged. Sales of their artisnal tacos, made from such exotic ingredients as ground beef, cheese, and beans, have been strong and seem to give hope to the coming year. Taco sales by month are shown in the table. Month Sales January 474 February 485 March 501 April 588 May 579 June 673 July 594 August 679 September 608 October 699 November 732 December 732 Armed only with his fingers, the owner decides that the safest forecasting approach is exponential smoothing with an alpha of 0.8. He uses the January demand and the January forecast just to get the ball rolling. Generate a forecast for the year using this technique and then calculate forecast errors using MAD. What is the mean absolute deviation for this forecasting approach?

497.4

After tallying the receipts for their first year of operation, the owners of the Taco Barn are encouraged. Sales of their artisnal tacos, made from such exotic ingredients as ground beef, cheese, and beans, have been strong and seem to give hope to the coming year. Taco sales by month are shown in the table. Month Sales January 474 February 485 March 501 April 588 May 579 June 673 July 594 August 679 September 608 October 699 November 732 December 732 Armed only with his fingers, the owner decides that the safest forecasting approach is exponential smoothing with an alpha of 0.8. He uses the January demand and the January forecast just to get the ball rolling. His fingers are aching by the time he reaches March and he is worried about his ability to stuff tacos during tomorrow's dinner rush. Help him out by finding the forecast for April.

There is instantaneous order receipt.

Assumptions of the EOQ model include:

trend plus irregular

Consider the following graph of sales. Which of the following characteristics is exhibited by the data?

trend plus seasonal

Consider the following graph of sales. Which of the following characteristics is exhibited by the data?

minimize

EOQ is the optimal order quantity that will ________ total inventory costs.

continuous

EOQ is used in a(n) ________ inventory system.

62.5

Given an actual demand of 59, a previous forecast of 64, and an alpha of .3, what would the forecast for the next period be using simple exponential smoothing?

continuous

In a(n) ________ inventory system, a constant amount is ordered when inventory declines to a predetermined level.

periodic

In a(n) ________ inventory system, an order is placed for a variable amount after a fixed passage of time.

1

In adjusted exponential smoothing, the closer beta is to ________, the stronger a trend is reflected.

decreases.

In an EOQ model, as the carrying cost increases, the order quantity:

1

In exponential smoothing, the closer alpha is to ________, the greater the reaction to the most recent demand.

remain the same.

In the basic EOQ model, if lead time increases from 5 to 10 days, the EOQ will:

shortage costs. carrying costs. ordering costs.

Inventory costs include:

10 weeks

The Krewe of Orpheus maintains a supply of swizzle sticks for events throughout the year. Demand for swizzle sticks is shockingly low, a quick check of krewe records from last year reveals that they used only 585,000, but the krewe president believes that they should be good stewards of what they have, so they seek to manage this inventory using the EOQ policy, although they prefer to refer to it as an EOKrewe policy for obvious reasons. Swizzle sticks are not expensive items, they cost a nickel apiece largely due to the club logo printed on each one. This also serves to increase the lead time as they can't be obtained from a standard restaurant supply house. Instead, they must be ordered with an eye towards the six day lead time. It costs $15 to place an order, most of this cost is a result of explaining the meaning of "Laissez les bons temps rouler" and why it should be printed on the edge of each swizzle stick. Holding cost is 20% of purchase price. A retired operations management professor moves to New Orleans, joins the Krewe of Orpheus and convinces krewe leadership to buy their own swizzle stick production equipment. They invest in a medium-scale machine called the Swizzo 2025, which is capable of producing swizzle sticks at the rate of 1800 per day. How long does it take to produce the optimal batch size?

325

The Krewe of Orpheus maintains a supply of swizzle sticks for events throughout the year. Demand for swizzle sticks is shockingly low, a quick check of krewe records from last year reveals that they used only 585,000, but the krewe president believes that they should be good stewards of what they have, so they seek to manage this inventory using the EOQ policy, although they prefer to refer to it as an EOKrewe policy for obvious reasons. Swizzle sticks are not expensive items, they cost a nickel apiece largely due to the club logo printed on each one. This also serves to increase the lead time as they can't be obtained from a standard restaurant supply house. Instead, they must be ordered with an eye towards the six day lead time. It costs $15 to place an order, most of this cost is a result of explaining the meaning of "Laissez les bons temps rouler" and why it should be printed on the edge of each swizzle stick. Holding cost is 20% of purchase price. A retired operations management professor moves to New Orleans, joins the Krewe of Orpheus and convinces krewe leadership to buy their own swizzle stick production equipment. They invest in a medium-scale machine called the Swizzo 2025, which is capable of producing swizzle sticks at the rate of 1800 per day. How many days per year will the Swizzo 2025 be running if they produce the optimal batch size?

4.6

The Krewe of Orpheus maintains a supply of swizzle sticks for events throughout the year. Demand for swizzle sticks is shockingly low, a quick check of krewe records from last year reveals that they used only 585,000, but the krewe president believes that they should be good stewards of what they have, so they seek to manage this inventory using the EOQ policy, although they prefer to refer to it as an EOKrewe policy for obvious reasons. Swizzle sticks are not expensive items, they cost a nickel apiece largely due to the club logo printed on each one. This also serves to increase the lead time as they can't be obtained from a standard restaurant supply house. Instead, they must be ordered with an eye towards the six day lead time. It costs $15 to place an order, most of this cost is a result of explaining the meaning of "Laissez les bons temps rouler" and why it should be printed on the edge of each swizzle stick. Holding cost is 20% of purchase price. A retired operations management professor moves to New Orleans, joins the Krewe of Orpheus and convinces krewe leadership to buy their own swizzle stick production equipment. They invest in a medium-scale machine called the Swizzo 2025, which is capable of producing swizzle sticks at the rate of 1800 per day. How many production runs per year will the Swizzo 2025 be producing if they produce the optimal batch size?

6934

The Krewe of Orpheus maintains a supply of swizzle sticks for events throughout the year. Demand for swizzle sticks is shockingly low, a quick check of krewe records from last year reveals that they used only 585,000, but the krewe president believes that they should be good stewards of what they have, so they seek to manage this inventory using the EOQ policy, although they prefer to refer to it as an EOKrewe policy for obvious reasons. Swizzle sticks are not expensive items, they cost a nickel apiece largely due to the club logo printed on each one. This also serves to increase the lead time as they can't be obtained from a standard restaurant supply house. Instead, they must be ordered with an eye towards the six day lead time. It costs $15 to place an order, most of this cost is a result of explaining the meaning of "Laissez les bons temps rouler" and why it should be printed on the edge of each swizzle stick. Holding cost is 20% of purchase price. A retired operations management professor moves to New Orleans, joins the Krewe of Orpheus and convinces krewe leadership to buy their own swizzle stick production equipment. They invest in a medium-scale machine called the Swizzo 2025, which is capable of producing swizzle sticks at the rate of 1800 per day. What is the average inventory if they produce an optimal batch size?

13,868

The Krewe of Orpheus maintains a supply of swizzle sticks for events throughout the year. Demand for swizzle sticks is shockingly low, a quick check of krewe records from last year reveals that they used only 585,000, but the krewe president believes that they should be good stewards of what they have, so they seek to manage this inventory using the EOQ policy, although they prefer to refer to it as an EOKrewe policy for obvious reasons. Swizzle sticks are not expensive items, they cost a nickel apiece largely due to the club logo printed on each one. This also serves to increase the lead time as they can't be obtained from a standard restaurant supply house. Instead, they must be ordered with an eye towards the six day lead time. It costs $15 to place an order, most of this cost is a result of explaining the meaning of "Laissez les bons temps rouler" and why it should be printed on the edge of each swizzle stick. Holding cost is 20% of purchase price. A retired operations management professor moves to New Orleans, joins the Krewe of Orpheus and convinces krewe leadership to buy their own swizzle stick production equipment. They invest in a medium-scale machine called the Swizzo 2025, which is capable of producing swizzle sticks at the rate of 1800 per day. What is the maximum inventory level if they produce at an optimal batch size?

126,548

The Krewe of Orpheus maintains a supply of swizzle sticks for events throughout the year. Demand for swizzle sticks is shockingly low, a quick check of krewe records from last year reveals that they used only 585,000, but the krewe president believes that they should be good stewards of what they have, so they seek to manage this inventory using the EOQ policy, although they prefer to refer to it as an EOKrewe policy for obvious reasons. Swizzle sticks are not expensive items, they cost a nickel apiece largely due to the club logo printed on each one. This also serves to increase the lead time as they can't be obtained from a standard restaurant supply house. Instead, they must be ordered with an eye towards the six day lead time. It costs $15 to place an order, most of this cost is a result of explaining the meaning of "Laissez les bons temps rouler" and why it should be printed on the edge of each swizzle stick. Holding cost is 20% of purchase price. A retired operations management professor moves to New Orleans, joins the Krewe of Orpheus and convinces krewe leadership to buy their own swizzle stick production equipment. They invest in a medium-scale machine called the Swizzo 2025, which is capable of producing swizzle sticks at the rate of 1800 per day. What is the optimal batch size? Assume 365 days per year.

$29,389

The Krewe of Orpheus maintains a supply of swizzle sticks for events throughout the year. Demand for swizzle sticks is shockingly low, a quick check of krewe records from last year reveals that they used only 585,000, but the krewe president believes that they should be good stewards of what they have, so they seek to manage this inventory using the EOQ policy, although they prefer to refer to it as an EOKrewe policy for obvious reasons. Swizzle sticks are not expensive items, they cost a nickel apiece largely due to the club logo printed on each one. This also serves to increase the lead time as they can't be obtained from a standard restaurant supply house. Instead, they must be ordered with an eye towards the six day lead time. It costs $15 to place an order, most of this cost is a result of explaining the meaning of "Laissez les bons temps rouler" and why it should be printed on the edge of each swizzle stick. Holding cost is 20% of purchase price. A retired operations management professor moves to New Orleans, joins the Krewe of Orpheus and convinces krewe leadership to buy their own swizzle stick production equipment. They invest in a medium-scale machine called the Swizzo 2025, which is capable of producing swizzle sticks at the rate of 1800 per day. What is their total cost (including goods) if they produce at an optimal batch size? Note that the price of the swizzle sticks didn't drop, the retired professor just wanted to keep busy.

69.34

The Krewe of Orpheus maintains a supply of swizzle sticks for events throughout the year. Demand for swizzle sticks is shockingly low, a quick check of krewe records from last year reveals that they used only 585,000, but the krewe president believes that they should be good stewards of what they have, so they seek to manage this inventory using the EOQ policy, although they prefer to refer to it as an EOKrewe policy for obvious reasons. Swizzle sticks are not expensive items, they cost a nickel apiece largely due to the club logo printed on each one. This also serves to increase the lead time as they can't be obtained from a standard restaurant supply house. Instead, they must be ordered with an eye towards the six day lead time. It costs $15 to place an order, most of this cost is a result of explaining the meaning of "Laissez les bons temps rouler" and why it should be printed on the edge of each swizzle stick. Holding cost is 20% of purchase price. A retired operations management professor moves to New Orleans, joins the Krewe of Orpheus and convinces krewe leadership to buy their own swizzle stick production equipment. They invest in a medium-scale machine called the Swizzo 2025, which is capable of producing swizzle sticks at the rate of 1800 per day. What will be their annual holding cost if they produce the optimal batch size?

about 14

The Krewe of Orpheus maintains a supply of swizzle sticks for events throughout the year. Demand for swizzle sticks is shockingly low, a quick check of krewe records from last year reveals that they used only 585,000, but the krewe president believes that they should be good stewards of what they have, so they seek to manage this inventory using the EOQ policy, although they prefer to refer to it as an EOKrewe policy for obvious reasons. Swizzle sticks are not expensive items, they cost a nickel apiece largely due to the club logo printed on each one. This also serves to increase the lead time as they can't be obtained from a standard restaurant supply house. Instead, they must be ordered with an eye towards the six day lead time. It costs $15 to place an order, most of this cost is a result of explaining the meaning of "Laissez les bons temps rouler" and why it should be printed on the edge of each swizzle stick. Holding cost is 20% of purchase price. How many orders will they place in a year if they order optimally (in accordance with the EOQ policy)?