Mike Larry is the Procurement manager at Coastal Supplies CC supplying general goods to the coastal towns. For some time, there stock levels have been low compared to the demand. Mega Wholesalers is offering to start supplying bulk goods to Coastal Supplies CC. As the procurement manager, Mike Larry has to make a decision to buy from Mega wholesalers. Note that the decision to buy or not to buy rests on Larry alone. How should Larry go about to decide?

Mike Larry is the Procurement manager at Coastal Supplies CC supplying general goods to the coastal towns. For some time, there stock levels have been low compared to the demand. Mega Wholesalers is offering to start supplying bulk goods to Coastal Supplies CC. As the procurement manager, Mike Larry has to make a decision to buy from Mega wholesalers. Note that the decision to buy or not to buy rests on Larry alone. How should Larry go about to decide?

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

Chapter16: Lean Supply Chain Management

Section: Chapter Questions

Problem 10DQ: The chapter presented various approaches for the control of inventory investment. Discuss three...

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Similar questions

The chapter presented various approaches for the control of inventory investment. Discuss three additional approaches not included that might involve supply chain managers.
In a multi-echelon supply chain, how can the Wilson approach be extended to optimize inventory levels at different stages of the supply chain? What challenges might arise in this context?
Chris Sandvig Irrigation, Inc., has summarized the price list from four potential suppliers of an underground control valve. See the table below. Annual usage is 1,100 valves; order cost is $10 per order; and annual inventory holding costs are $7.55 per unit. D D Vendor A Quantity 1-14 15-24 25-99 100-199 200-399 400+ Price $35.00 34.75 33.55 32.35 31.15 30.75 Vendor C Vendor D Vendor A D Vendor B Vendor B Which vendor should be selected and what order quantity is best if Sandvig Irrigation wants to minimize total cost? Chris Sandvig Irrigation should order units at a time from (enter your response as a whole number). Quantity 1-24 25-99 100-199 200-399 400+ Price $34.75 34.00 32.80 31.60 30.50 MacBook Air O Vendor C Quantity 1-49 50-149 150-299 300+ Price $34.50 33.75 32.50 31.10 Vendor D Quantity 1-149 150-299 300+ Price $34.25 33.00 31.00 Next
Mr. Dan Stockman is the procurement manager for Slicker Image (SI), an upscale retailer of novelty products. It is mid-August, and Mr. Stockman is wondering how many units of a new multi-function smart bracelet to order for the upcoming holiday season (November and December). The Malaysian manufacturer of this item, TechToys, requires orders to be placed in late August for delivery in late October, in time for holiday sales. Based on past experience with similar products, Mr. Stockman believes that the holiday demand (Nov-Dec) for the bracelet is Normally distributed with a mean of 3,000 units and standard deviation of 900. TechToys sells the item to SI at a unit price of $ 145 per unit, and SI has decided to set the retail price at $ 200 during the regular selling season (Nov-Dec). At the end of December, SI will mark down the price by 50% (i.e., sell the item for $ 100) to sell off any left-over items. TechToys incurs a cost of $ 105 per unit to manufacture this bracelet. For…
Chris Sandvig Irrigation, Inc., has summarized the price list from four potential suppliers of an underground control valve. See the table below. Annual usage is 800 valves; order cost is $7 per order; and annual inventory holding costs are $2.15 per unit. D Vendor A units at a time from Vendor C Vendor B Quantity 1-14 15-24 25-99 100-199 200-399 400+ Which vendor should be selected and what order quantity is best if Sandvig Irrigation wants to minimize total cost? Chris Sandvig Irrigation should order (enter your response as a whole number). Vendor A Price $35.00 34.75 33.55 32.35 31.15 30.75 Vendor D Vendor B Quantity 1-24 25-99 100-199 200-399 400+ Price $34.75 34.00 32.80 31.60 30.50 Vendor C Quantity 1-49 50-149 150-299 300+ Price $34.50 33.75 32.50 31.10 Vendor D Quantity 1-149 150-299 300+ Price $34.25 33.00 31.00
Describe and explain the procurement process. What is the importance of supplier selection in the hospitality industry? Define inventory management and its importance in the hospitality industry. Why is it important to have an indicator measuring the performance of Supply chain management in any organization?
No written by hand solution The questions below refer to the following SAME paragraph: Suppose a retailer Mojo, holds safety stock for an item to accommodate a 98% service level with uncertain demand. There are two supply options: Supplier X taking 5 days to deliver replenishments, and Supplier Y taking 3 days to replenish. Both suppliers charge the same price for the item. Ignoring differences in fixed order costs, the retailer should choose: Group of answer choices Supplier X Option Y only if the critical ratio is less than 0.9 Option X only if the critical ratio is greater than 0.9 Supplier Y
Chris Sandvig Irrigation, Inc., has summarizedthe price list from four potential suppliers of an undergroundcontrol valve. See the accompanying table. Annual usage is2,400 valves; order cost is $10 per order; and annual inventory holding costs are $3.33 per unit.Which vendor should be selected and what order quantityis best if Sandvig Irrigation wants to minimize total cost?
What is the importance of supplier selection in the hospitality industry? Define inventory management and its importance in the hospitality industry. Why is it important to have an indicator measuring the performance of Supply chain management in any organization?
A company's distribution and warehouse expenses do NOT include which one of the following? a) The costs of processing, boxing, packaging, handling, and shipping orders to footwear retailers and -online buyers b)A standard import tariff of $4.00 per pair on any pairs imported from the company's foreign production facilities--tariffs are due and payable at the port of entry rather than when the pairs are sold c)Annual leasing and maintenance fees of $1 million for each of the company's four distribution centers; however, such expenses fall to 5 times the number of pairs sold when warehouse volume in any region is less than 200,000 pairs annually (should company managers decide to abandon selling footwear in a geographic region, leasing and maintenance costs will fall to $0 (resuming if/when sales begin again) d)The inventory costs of carrying unsold pairs over from the prior year ($0.50 per pair on required inventrory and $1 per pair on additional unsold pairs) e)Per pair freight…
One of your Taiwanese suppliers has bid on a new line of molded plastic parts that is currently being assembled at your plant. The supplier has bid $0.10 per part, given a forecast you provided of 200,000 parts in year 1; 300,000 in year 2; and 500,000 in year 3. Shipping and handling of parts from the supplier’s factory is estimated at $0.01 per unit. Additional inventory handling charges should amount to $0.005 per unit. Finally, administrative costs are estimated at $20 per month. Although your plant is able to continue producing the part, the plant would need to invest in another molding machine, which would cost $10,000. Direct materials can be purchased for $0.05 per unit. Direct labor is estimated at $0.03 per unit plus a 50 percent surcharge for benefits; indirect labor is estimated at $0.011 per unit plus 50 percent benefits. Up-front engineering and design costs will amount to $30,000. Finally, management has insisted that overhead be allocated if the parts are made in-house…
What is the importance of supplier selection in the hospitality industry? Define inventory management and its importance in the hospitality industry.