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Sport Obermeyer - Inventory Models.doc
This assignment is designed for practicing the concepts and tools
covered in the inventory models.
Parka Production
We use the sample data given in Exhibit 10 from the Sport Obermeyer
case. Assume demand of each style of parka is normally distributed.
Make a recommendation for how many units of each style Wally Obermeyer
should order during the initial phase of production. Assume that all ten
styles in the sample problem are made in Hong Kong. Also assume that
there would be no future production for these parkas (i.e., only one
production decision is taken to satisfy the demand). Ignore the minimum
order quantity constraint, and ignore the fact that the total size of
your order must be less than or equal to 10,000.
Take your answers to part a) above, and reduce the number of units for
each style by 10%. At this level of reduced production, if you could
produce just one more unit, which of the ten styles would you choose?
Stocking Needles
A local pediatrician’s office is reviewing its stocking policy for
needles used to give children vaccinations against childhood illnesses.
A new needle is used for each vaccination, and historically these
needles have been used at an average rate of 25 needles per day. (The
office is open approximately 300 days per year.) Each time an order is
placed it costs the office about $8 to place the order (regardless of
the quantity purchased), and needles are typically delivered 4 business
days after the order is placed. It costs about $0.20 to hold a needle in
stock for one year. (Assume that the office can order needles in any
quantity.)