Concept explainers
Oh No!, Inc., sells three models of radar detector units. It buys the three basic models (E, F, and G) from a Japanese manufacturer and adds one, two, or four lights (component D) to further differentiate the models D is bought from a domestic producer.
Lead times are one week for all items except C, which is two weeks. There are ample supplies of the basic units (E, F, and G) on hand. There are also 10 units of B, 10 units of C, and 25 units of D on hand. Lot-sizing rules are lot-for-lot ordering for all items except D, which must he ordering in multiples of 100 units. There is a scheduled receipt of 100 units of D in week 1.
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EBK OPERATIONS MANAGEMENT
- 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?arrow_forwardInventory Management You are the store manager at a local branch of DigiLife, a large electronics retail chain. A new version of a popular consumer electronics device called the Amulet is coming out this year. It is your job to sell as many Amulets as you can while minimizing your costs in order to maximize your store's profits. Your Goal Earn $1,000,000 in net profits of Amulet sales.arrow_forwardFigure shows a partially completed MPS record for 2 inch pneumatic control valves. Suppose that you receive the following orders at right for the valves (shown in the order of their arrival). As they arrive, you must decide whether to accept or reject them. Which orders would you accept for shipment?Order Amount (Units) Week Requested1 15 22 30 53 25 34 75 7arrow_forward
- 2. VGHC, humanitarian aid service in the Sub-Saharan Africa, operates its laboratory on-site. The lab maintains an inventory of test kits for a variety of procedures. VGHC uses 780 A1C kits each year. Ordering costs are $15 and holding costs are $3 per kit per year. The new price list indicates that orders of fewer than 73 kits will cost $60 per kit, 73 through 144 kits will cost $56 per kit, and orders of more than 144 kits will cost $53 per kit. Determine the optimal order quantity and the total cost.arrow_forwardCycle counting is conducted more frequently for C items since they are less costly and easy to count > true or false?arrow_forwardCryolab Inc makes and sells a lawn fertilizer called Hypergro. The company has developed standard costs for one bag of Hypergro as follows: Standard Quantity/Hours Standard Price/Rate Standard Cost per Bag Direct Material 25 pounds ₱ 0.75 ₱18.75 Direct Labor 0.25 hours ₱69.00 ₱17.30 Variable overhead 0.25 hours ₱24.00 ₱ 6.00 Total ₱42.05 The company had no beginning inventories of any kind on January 1. Variable overhead is applied to production on the basis of standard direct labor hours. During January, the following activity was recorded by the company: Production of Fastgro: 23,000 bags Direct materials purchased: 585,000 pounds at a cost of ₱436,250 Direct labor worked: 5,800 hours at a cost of ₱397,300 Variable overhead incurred: ₱140,650 Inventory of direct materials on January 31: 8,000 pounds Compute the variances and indicate whether it is FAVORABLE (F) or UNFAVORABLE (U) in your solution sheet. The raw…arrow_forward
- The following table contains figures on the annual usage and unit costs for a random sample of 12 items. Develop and A-B-C classification for these items: Item Name Annual Usage (No of Items) Unit Cost 1 500 TK 4300 2 3000 720 3 1900 500 4 1000 710 5 4500 250 6 2500 192 7 400 200 8 500 190 9 200 210 10 1000 35 11 3000 10 12 19000 3 Brown and Brown Electronics manufacture a line of digital audiotape (DAT) players. While there are differences among the various products, there are a number of common parts within each player. The bill materials showing the number of each item required, lead times and the current inventory on hand for the parts and components, follows: Demand of products A & B and demand of spares components are shown below: Item Demand on 5th week Demand on 7th Week On-Hand Lead Time (Weeks) A 700 ------ 30 1 B 1200 ------ 50…arrow_forwardGreen Gardens' owner has asked your advice about a possible problem at his business. Over the last 6 months the large-sized lawn and garden inventory (ie, tables, chairs, planters, etc.) has appeared to be short. The inventory records that employees use to determine what is on hand show that more inventory is available than can actually be located. This has cause frustration and mis-trust in the inventory records for the sales employees. The owner realizes that the problem is bigger than just frustrated employees. He is afraid that inventory is being stolen, a problem he didn't think possible given that these are large items that are not easily moved. Requirements: Provide the owner with two internal controls that he could implement to reduce the likelihood of theft of the lawn and garden inventory.arrow_forwardConsider the following information. PART X Gross Requirements Scheduled Receipts Projected On-Hand Inventory 100 Q = 60, LT= 3 weeks, Safety Stock = 5 1 70 70 PART X Gross Requirements Scheduled Receipts Projected On-Hand Inventory 100 Planned Order Releases 1 70 70 100 2 0 > X WEEK 3 40 Compute the planned order releases and projected on-hand inventory for component part X. Round your answers to the nearest whole number. If your answer is zero, enter "0". 2 0 4 0 100 WEEK 3 40 5 160 60 4 0 40 0 X 5 160 Check My Work -60 0arrow_forward
- Demand for portable music players for joggers has caused Nancy Industries (Nancy) to grow almost 50 percent over the past year. The number of joggers continues to expand, so Nancy expects demand for music player to also expand, because, as yet, no safety laws have been passed to prevent joggers from wearing them. Demands for the players for last year was as follows : Month Demand (units) Jan 4200 Feb 4300 Mar 4000 Apr 4400 May 5000 Jun 4700 Jul 5300 Aug 4900 Sep 5400 Oct 5700 Nov 6300 Dec 6000 Question : From the choice of simple moving average, weighted moving average, exponential smoothing, and linear regression analysis, which forecasting technique would you consider the most accurate to Nancy Industries? Why?arrow_forwardThe sales department receives all orders from the customers. While receiving the order, the sales team authorizes the payment and check line items. If authorization is failed, a cancelation message is sent to the customer. On the other hand, each line item is checked with the stock. If it is in stock, assigned to the order otherwise the item is removed from the list. If stocks are available for all products and payment is authorized, the sales team dispatched the order.Shipping teams ship the order to the customer. The method of delivery is decided conditionally. Depending on the condition either the Urgent Delivery activity or the Regular Delivery activity is performed. The delivery procedure is finished when the customer receives it and signs in. Draw an Activity diagram based on the above scenario.arrow_forwardJosh Smith, the materials manager at a retail store, has determined that a particular product experienced 5 turns last year, with an annual sales volume of $15 million. What was the average inventory value for this product last year? $2.5 million $2.75 million $3 million $5 millionarrow_forward
- Purchasing and Supply Chain ManagementOperations ManagementISBN:9781285869681Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. PattersonPublisher:Cengage Learning