A fresh food company in Oman is specialized in apples distribution in Oman. Annual sales forecast is 5400 boxes of apple. It costs OR 10 to make and receive an order and holding cost is OR 3.5 per box per year. The prices depend on quantities purchased such that the order quantities (in boxes) from 1 to 199 at a unit price RO 5; quantity 200 to 499 at a unit price 4.5 RO; and quantity 500 and more at a per unit price of 4 RO. If the discount option is considered, then the best order quantity that minimizes the total annual inventory cost is

A fresh food company in Oman is specialized in apples distribution in Oman. Annual sales forecast is 5400 boxes of apple. It costs OR 10 to make and receive an order and holding cost is OR 3.5 per box per year. The prices depend on quantities purchased such that the order quantities (in boxes) from 1 to 199 at a unit price RO 5; quantity 200 to 499 at a unit price 4.5 RO; and quantity 500 and more at a per unit price of 4 RO. If the discount option is considered, then the best order quantity that minimizes the total annual inventory cost is

Purchasing and Supply Chain Management

6th Edition

ISBN:9781285869681

Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

ChapterC: Cases

Section: Chapter Questions

Problem 5.1SC: Scenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing...

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Scenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing expenditures for packaging materials with Jeff Joyner. Ben was particularly disturbed about the amount spent on corrugated boxes purchased from Southeastern Corrugated. Ben said, I dont like the salesman from that company. He comes around here acting like he owns the place. He loves to tell us about his fancy car, house, and vacations. It seems to me he must be making too much money off of us! Jeff responded that he heard Southeastern Corrugated was going to ask for a price increase to cover the rising costs of raw material paper stock. Jeff further stated that Southeastern would probably ask for more than what was justified simply from rising paper stock costs. After the meeting, Ben decided he had heard enough. After all, he prided himself on being a results-oriented manager. There was no way he was going to allow that salesman to keep taking advantage of Coastal Products. Ben called Jeff and told him it was time to rebid the corrugated contract before Southeastern came in with a price increase request. Who did Jeff know that might be interested in the business? Jeff replied he had several companies in mind to include in the bidding process. These companies would surely come in at a lower price, partly because they used lower-grade boxes that would probably work well enough in Coastal Products process. Jeff also explained that these suppliers were not serious contenders for the business. Their purpose was to create competition with the bids. Ben told Jeff to make sure that Southeastern was well aware that these new suppliers were bidding on the contract. He also said to make sure the suppliers knew that price was going to be the determining factor in this quote, because he considered corrugated boxes to be a standard industry item. Is Ben Gibson acting legally? Is he acting ethically? Why or why not?
Scenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing expenditures for packaging materials with Jeff Joyner. Ben was particularly disturbed about the amount spent on corrugated boxes purchased from Southeastern Corrugated. Ben said, I dont like the salesman from that company. He comes around here acting like he owns the place. He loves to tell us about his fancy car, house, and vacations. It seems to me he must be making too much money off of us! Jeff responded that he heard Southeastern Corrugated was going to ask for a price increase to cover the rising costs of raw material paper stock. Jeff further stated that Southeastern would probably ask for more than what was justified simply from rising paper stock costs. After the meeting, Ben decided he had heard enough. After all, he prided himself on being a results-oriented manager. There was no way he was going to allow that salesman to keep taking advantage of Coastal Products. Ben called Jeff and told him it was time to rebid the corrugated contract before Southeastern came in with a price increase request. Who did Jeff know that might be interested in the business? Jeff replied he had several companies in mind to include in the bidding process. These companies would surely come in at a lower price, partly because they used lower-grade boxes that would probably work well enough in Coastal Products process. Jeff also explained that these suppliers were not serious contenders for the business. Their purpose was to create competition with the bids. Ben told Jeff to make sure that Southeastern was well aware that these new suppliers were bidding on the contract. He also said to make sure the suppliers knew that price was going to be the determining factor in this quote, because he considered corrugated boxes to be a standard industry item. As the Marketing Manager for Southeastern Corrugated, what would you do upon receiving the request for quotation from Coastal Products?
Problem 20-10 (Algo) You are a newsvendor selling San Pedro Times every morning. Before you get to work, you go to the printer and buy the day’s paper for $0.50 a copy. You sell a copy of San Pedro Times for $1.25. Daily demand is distributed normally with mean = 335 and standard deviation = 67. At the end of each morning, any leftover copies are worthless and they go to a recycle bin. a. How many copies of San Pedro Times should you buy each morning? (Use Excel's NORMSINV() function to find the correct critical value for the given α-level. Round your z-value to 2 decimal places and final answer to to 2 decimal places.) b. Based on a, what is the probability that you will run out of stock? (Round your answer to the nearest whole number.)
Problem 20-10 (Algo) You are a newsvendor selling San Pedro Times every morning. Before you get to work, you go to the printer and buy the day's paper for $0.30 a copy. You sell a copy of San Pedro Times for $1.10. Daily demand is distributed normally with mean = 265 and standard deviation = 53. At the end of each morning, any leftover copies are worthless and they go to a recycle bin. a. How many copies of San Pedro Times should you buy each morning? (Use Excel's NORMSINV() function to find the correct critical value for the given a-level. Round your z-value to 2 decimal places and final answer to to 2 decimal places.) Optimal order quantity b. Based on a, what is the probability that you will run out of stock? (Round your answer to the nearest whole number.) Probability
ABC analysis on the following set of products Item Annual Demand Unit CostA 211 800 R9B 390 100 R90C 003 450 R6D 100 400 R100E 707 85 R2,000F 660 250 R320G 473 500 R75H 921 100 R75 Soft goods department sells 175 units per month of a certain large bath towel. The unit cost of a towel to the manufacturer is R2.50 and the cost of placing an order has been estimated to be R12.00. There is an inventory carrying charge of 27% of the unit cost per year. What is the optimal order quantity, the order frequency, and the annual holding and setup cost. If the ordering cost can be cut to R4.00, what will be the new economicorder quantity, the order frequency, and annual holding and setup costs.
Problem 20-10 (Algo) You are a newsvendor selling San Pedro Times every morning. Before you get to work, you go to the printer and buy the day's paper for $0.45 a copy. You sell a copy of San Pedro Times for $1.40. Daily demand is distributed normally with mean = 340 and standard deviation = 68. At the end of each morning, any leftover copies are worthless and they go to a recycle bin. a. How many copies of San Pedro Times should you buy each morning? (Use Excel's NORMSINV() function to find the correct critical value for the given a-level. Round your z-value to 2 decimal places and final answer to to 2 decimal places.) 8 Answer is complete but not entirely correct. Optimal order quantity 0.05 b. Based on a, what is the probability that you will run out of stock? (Round your answer to the nearest whole number.) * Answer is complete but not entirely correct. Probability 3 X %
An importer operates a small warehouse that has the following annual costs. Wages for the purchasing agents are $45,000 per year, purchasing expenses are $30,000 per year, customs and brokerage costs are $30 per order, the cost of financing the inventory is 8%, storage costs are 7%, and the risk costs are 10%. The average inventory is $250,000 and 6,000 orders are placed in a year. What is the annual ordering costs (in dollars)? Your answer is an integer. how do you get Order & Carrying cost?
The local supermarket buys lettuce each day to ensure really fresh produce. Each morning, any lettuce that is left from the previous day is sold to a dealer that resells it to farmers who use it to feed their animals. This week, the supermarket can buy fresh lettuce for $9.00 a box. The lettuce is sold for $17.00 a box and the dealer that sells old lettuce is willing to pay $5.00 a box. Past history says that tomorrow's demand for lettuce averages 258 boxes with a standard deviation of 41 boxes. How many boxes of lettuce should the supermarket purchase tomorrow? (Use Excel's NORM.S.INV() function to find the z value. Round your answer to the nearest whole number.) Number of boxes
Consider the supply : Last year, the retailer’s weekly variance of demand was 200 units.The variance of orders was 500, 600, 750, and 1,350 units for theretailer, wholesaler, distributor, and manufacturer, respectively.(Note that the variance of orders equals the variance of demandfor that firm’s supplier.)a) Calculate the bullwhip measure for the retailer.b) Calculate the bullwhip measure for the wholesaler.c) Calculate the bullwhip measure for the distributor.d) Calculate the bullwhip measure for the manufacturer. e) Which firm appears to be contributing the most to the bull-whip effect in this supply chain?
Alina Limited is a manufacturer of widgets orders components for use in manufacturing. The estimated demand for the components during the coming year is 15,000. Order costs are $100 per order; carrying costs are $12 per component. Using the economic order quantity model What is Alina Ltd’s optimum order quantity? If the supplier guarantees a three (3) day delivery on any order that is placed, What is the re-order point?
The local supermarket buys lettuce each day to ensure really fresh produce. Each morning, any lettuce that is left from the previous day is sold to a dealer that resells it to farmers who use it to feed their animals. This week, the supermarket can buy fresh lettuce for $10.00 a box. The lettuce is sold for $21.00 a box and the dealer that sells old lettuce is willing to pay $2.00 a box. Past history says that tomorrow's demand for lettuce averages 262 boxes with a standard deviation of 43 boxes. How many boxes of lettuce should the supermarket purchase tomorrow? Note: Use Excel's NORM.S.INV() function to find the z value. Round your answer to the nearest whole number. Number of boxes
The local supermarket buys lettuce each day to ensure fresh produce. Each morning any lettuce that is left from the previous day is sold to a dealer that resells it to farmers who use it to feed their animals. This week the supermarket can buy fresh lettuce for $4.00 a box. The lettuce is sold for $10.00 a box and the dealer that sells old lettuce is willing to pay $1.50 a box. History says that tomorrow’s demand for lettuce averages 250 boxes with a standard deviation of 34 boxes. How many boxes of lettuce should the supermarket purchase tomorrow?