Answer:
- Economic order quantity= 1406 units
- Safety Stock= 630 units
- Reorder Point= 14130 units
Explanation:
Given Demand D= 78,000units/year
Ordering cost S = $38.00/order
Holding cost H = $3.00unit/year
Average lead time = 9 weeks
Standard deviation of weekly demand = 120 units
a) Economic order quantity:
EOQ = \sqrt{(2*D*S)/H}
EOQ = \sqrt{(2*78000*38)/3}
1405.7 = <u>1406 Units</u>
b)<u>
Safety Stock:</u>
Weekly demand = 78000/52 =1500 units
Standard deviation of weekly demand = 120 units
Lead time is 9 weeks
Using the normsinv() in excel the Z value for the desired 96% service level is 1.75
Safety stock = z\sigma _{d}\sqrt{L}
= 1.75*120*\sqrt{9}
= 630 units
Reorder point = average lead time demand + safety stock
= lead time * weekly demand + saftey stock
= 9*1500 + 630
= 13500 + 630
Reorder point = 14130
Answer:
Reducing risk
Explanation:
The two ways by which risk can be managed are;
✓ Risk avoidance
✓ risk reduction
risk reduction are activities needed to bring about lower likelihood of risk as well as severity of loss. We can reduce risk through reduction of allocation of our resources to risky situation. An example of reducing risk is in the instance of Financial markets that are making the process of borrowing large amounts of money easier because they simplify the negotiation process between borrowers and lenders.
It is true that Enterprise risk management is a valuable approach that can better align security functions with the business mission while offering opportunities to lower costs.
<h3>What is Risk Management?</h3>
In order to limit, monitor, and control the likelihood or impact of unfortunate events or to maximize the realization of possibilities, risk management entails the identification, appraisal, and prioritization of risks (defined by ISO 31000 as the influence of uncertainty on objectives).
Instability in global markets, threats from project failures (at any stage of design, development, production, or maintenance of life cycles), legal liabilities, credit risk, accidents, natural causes and disasters, deliberate attack from an adversary, or events with uncertain or unpredictable root causes are just a few examples of the many different types of risks that can arise.
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Answer:
Specialty store
Explanation:
A specialty store is a retail business that specializes in a particular range of products and its related merchandise. A specialty store will have an extensive depth of the merchandise that its stocks. For example, a business may focus on office supplies, men clothing, or household appliances as opposed to having a wide range of consumer products.
Specialty stores will often sell their products at a premium price. They offer excellent and friendly customer service. Employees at a specialty store have in-depth knowledge about their products and will provide expert advice to customers.
