Craftwood Furniture Company is a U.S.–based furniture manufacturer that offshored all of its actual manufacturing operations to China about a decade ago. It set up a distribution center in Hong Kong, from which the company ships its items to the United States on container ships. The company learned early on that it could not rely on local Chinese freight forwarders to arrange for sufficient containers for the company’s shipments, so it contracted to purchase containers from a Taiwanese manufacturer and then sell them to shipping companies at the U.S. ports the containers are shipped to. Craftwood needs 715 containers each year. It costs $265 to hold a container at its distribution center, and it costs $6,000 to process and receive an order for the containers. The cost of not having sufficient containers and delaying a shipment is $14,000 per container. Determine the optimal order size, minimum total annual inventory cost, and maximum shortage level.
Critical Path Method
The critical path is the longest succession of tasks that has to be successfully completed to conclude a project entirely. The tasks involved in the sequence are called critical activities, as any task getting delayed will result in the whole project getting delayed. To determine the time duration of a project, the critical path has to be identified. The critical path method or CPM is used by project managers to evaluate the least amount of time required to finish each task with the least amount of delay.
Cost Analysis
The entire idea of cost of production or definition of production cost is applied corresponding or we can say that it is related to investment or money cost. Money cost or investment refers to any money expenditure which the firm or supplier or producer undertakes in purchasing or hiring factor of production or factor services.
Inventory Management
Inventory management is the process or system of handling all the goods that an organization owns. In simpler terms, inventory management deals with how a company orders, stores, and uses its goods.
Project Management
Project Management is all about management and optimum utilization of the resources in the best possible manner to develop the software as per the requirement of the client. Here the Project refers to the development of software to meet the end objective of the client by providing the required product or service within a specified Period of time and ensuring high quality. This can be done by managing all the available resources. In short, it can be defined as an application of knowledge, skills, tools, and techniques to meet the objective of the Project. It is the duty of a Project Manager to achieve the objective of the Project as per the specifications given by the client.
Craftwood Furniture Company is a U.S.–based furniture manufacturer that offshored all of its
actual manufacturing operations to China about a decade ago. It set up a distribution center in
Hong Kong, from which the company ships its items to the United States on container ships.
The company learned early on that it could not rely on local Chinese freight forwarders to
arrange for sufficient containers for the company’s shipments, so it contracted to purchase
containers from a Taiwanese manufacturer and then sell them to shipping companies at the
U.S. ports the containers are shipped to. Craftwood needs 715 containers each year. It costs
$265 to hold a container at its distribution center, and it costs $6,000 to process and receive an
order for the containers. The cost of not having sufficient containers and delaying a shipment
is $14,000 per container. Determine the optimal order size, minimum total annual inventory
cost, and maximum shortage level.
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