OPERATIONS MANAGEMENT IN THE SUPPLY CHAIN: DECISIONS & CASES (Mcgraw-hill Series Operations and Decision Sciences)
7th Edition
ISBN: 9780077835439
Author: Roger G Schroeder, M. Johnny Rungtusanatham, Susan Meyer Goldstein
Publisher: McGraw-Hill Education
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Chapter 17, Problem 3DQ
Summary Introduction
To determine: The examples of core competencies that would not be outsourced.
Introduction:
The profit-leverage effect would reduce the inventory cost, which would improve the profit of the firm. When the purchase cost reduces, the profit and sales would increase equally.
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Kamal Fatehl, production ma nager of Kennesaw Manufacturing, finds his profit at $15,000 (as shown in the following statement)- inadequate for expanding his business. The bank isinsisting on an improved profit picture prior to approval of a loan for some new equipment. Kamal would like to improve the profit line to $25,000 so he can obtain the bank's approval for the loan. a) What percentage improvement is needed in a supply chain strategy for profit to improve to $25,000? What is the cost of material with a $25,000 profit?b) What percentage improvement is needed in a sales strategy for profit to improve to $25,000? What must sales be for profit to improve to $25,000?
Chapter 17 Solutions
OPERATIONS MANAGEMENT IN THE SUPPLY CHAIN: DECISIONS & CASES (Mcgraw-hill Series Operations and Decision Sciences)
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- Explain the advantageous of outsourcing ?arrow_forwardDiscuss the implications of outsourcing in supply chain strategy and give an example of how this has improved a particular business's economic position. Also, what are some ethical implications of outsourcing?arrow_forward1.How would you distinguish between operations processes and supply chain processes? With an example, illustrate how servitisation may be used by manufacturing organisations. What is the relationship between efficiency and value? Why is sustainability an important component in a firm’s strategy development? The Shell Oil Company has “People, Planet and Profit” as its triple bottom line phrase. Whatdoes the term “People” as contained in the phrase mean? Why must supply chain risks be determined and managed? From an economic point of view, provide a justification for product and service design orredesign. State one consequence a firm is likely to suffer as a result of a lengthy product design. Explain why quality is cited by CEOs and business leaders as the most important factor in thelong-term profitability and success of the firm. What production strategy would you say best describes the construction of the Akosombodam? Identify the production process likely to be used by a…arrow_forward
- Explain what strategic sourcing is.arrow_forwardDescribe outsourcing methods, taking into account the complexities of the supply chain design. Furthermore, what is the appropriateness of outsourcing with regard to decision making and vertical integration, as these principles influence the management of the whole supply chain?arrow_forwardDescribe the triple bottom line strategy with an example of a businesy that uses it in operations strategy ?arrow_forward
- Enumerate and briefly explain the five (5) outsourcing strategies.arrow_forwardCurrently, the trend has been moving toward outsourcing combined with the creation of supply chain relationships, although traditional firms preferred the “make” option. What drives organisations to make their own materials, components, services and/or equipment in house instead of outsourcing?arrow_forwardDiscuss the reason to outsource and the resulting benefits?arrow_forward
- List some examples of firms that might decide to shut down in the short run. What do you think would make them choose this course of action? Discuss the industry and firms in it, along with the conditions prompting the potential shutdowns. Could seasonality in demand be a potential factor? Explain. What is the exact price for the product that is referred to as the “shut down” point in the short run?arrow_forwardHahn Manufacturing purchases a key component of one ofits products from a local supplier. The current purchase priceis $1,500 per unit. Efforts to standardize parts succeededto the point that this same component can now be used infive different products. Annual component usage should in-crease from 150 to 750 units. Management wonders whetherit is time to make the component in-house rather than tocontinue buying it from the supplier. Fixed costs would in-crease by about $40,000 per year for the new equipment andtooling needed. The cost of raw materials and variable over-head would be about $1,100 per unit, and labor costs wouldbe $300 per unit produced.a. Should Hahn make rather than buy?b. What is the break-even quantity?c. What other considerations might be important?arrow_forwardOf the following, discuss which you believe is the best tool for supporting future growth and cost management. Why?-Value chain analysis.arrow_forward
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