When a seller ships its inventory to its customer at year-end and the terms are CIF, then the buyer must remit to the seller : A. The selling price of the inventory only B. The selling price of the inventory plus freight costs C. The selling price of the inventory less freight costs D. The freight costs only

When a seller ships its inventory to its customer at year-end and the terms are CIF, then the buyer must remit to the seller : A. The selling price of the inventory only B. The selling price of the inventory plus freight costs C. The selling price of the inventory less freight costs D. The freight costs only

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...

See similar textbooks

Similar questions

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…
Acme Inc. has decided to outsource and offshore a small electric motor that it currently manufactures itself. It has found an offshore supplier that charges $925,000 for a minimum order quantity of 5,000 motors. Shipping costs for this quantity are $15,000. The buyer expects to place four orders per year to meet its annual need for 20,000 motors. Annual carrying cost is 25% of unit price, and import tariffs are 12% of unit price. The company expects to spend $12,500 per year on contracting and relationship maintenance.What is the total cost of outsourcing and offshoring this motor?
The Iteration 2 of the given transportation model by NWCR is optimal. What is the delivery schedule of source Z and what does the shipment cost? SOURCE DEMAND X Y N OZ-R; 1000 OZ-Q; 1100 OZ-R; 100 OZ-S; 250 P 75 8 12 11 DESTINATION Q 80 5 8 11 R 120 7 10 10 S 50 11 13 14 SUPPLY 100 125 100 325
1. Maxmin Trading Company buys 1,000 pcs of chair per month. The cost per chair is Php500 and ordering cost is Php400. The inventory carrying cost is estimated at 10% of the price of the chair. Determine the EOQ. 2. Maxmin Trading Company buys 1,000 pcs of chair per month. The cost per chair is Php500 and ordering cost is Php400. The inventory carrying cost is estimated at 10% of the price of the chair. Determine the total carrying cost. 3. Maxmin Trading Company buys 1,000 pcs of chair per month. The cost per chair is Php500 and ordering cost is Php400. The inventory carrying cost is estimated at 10% of the price of the chair. Determine the total ordering cost. 4. Maxmin Trading Company buys 1,000 pcs of chair per month. The cost per chair is Php500 and ordering cost is Php400. The inventory carrying cost is estimated at 10% of the price of the chair. Determine the number of orders required per year. 5. Minmax Processing Company has an average requirement of 5 boxes of…
Annique is a leading consumer products company dealing in cosmetics and other personal care products. Annique aims to reduce the high inventory levels across their forward supply chain and reduce high warehousing costs within the next financial year. 7.Which one of the following is NOT a cost Anniqueshould consider to reduce warehousing costs? aWarehouse staff bWarehouse insurance cWarehouse levies dWarehouse obsolescence 8. Which of the following are disadvantages of Anniquehaving too much inventory? i. Bigger insurance premiums ii. More warehouse staff iii. Higher unit prices iv. Higher production costs v. Depreciation losses a. i ii iii iv v b. i ii v c. iii iv v d. i ii iii v 9.Annique decided that they need a new inventory-control system, preferably computer-assisted, to maintain their inventory at a minimum level. What inventory-control system would Annique make use of? 1The cyclical-ordering system. 2The system of fixed-order quantities. 3The just-in-time…
Emery Pharmaceutical uses an unstable chemical compound that must be kept in an environment where both temperature and humidity can be controlled. Emery uses 200 pounds per month of the chemical, estimates the holding cost to be £3.33 (because of spoilage), and estimates order costs to be £10 per order. The cost schedules of four suppliers are as follows: Vendor 1 Vendor 2 Quantity Price/LB (£) Quantity Price/LB (E) 1-49 35.00 1-74 34.75 50-74 34.75 75-149 34.00 75-149 33.55 150-299 32.80 150-299 32.35 300-499 31.60 300-499 31.15 500+ 30.50 500+ 30.75 Vendor 3 Vendor 4 Quantity Price/LB (£) Quantity Price/LB (£) 34.50 1-199 34.25 1-99 33.75 200-399 33.00 100-199 400+ 31.00 200-399 32.50 400+ 31.10 a) What quantity should be ordered, and which supplier should be used? b) Discuss factor(s) should be considered besides total cost.
Gainesville Cigar stocks Cuban cigars that have variable lead times because of the difficulty in importing the product: lead time is normally distributed with an average of 6 weeks and a standard deviation of 2 weeks. Demand is also a variable and normally distributed with a mean of 200 cigars per week and a standard deviation of 25 cigars.a) For a 90% service level, what is the ROP?b) What is the ROP for a 95% service level?c) Explain what these two service levels mean. Which is preferable?
Your options for shipping $96,970 of machine parts from Baltimore to Kuala Lumpur, Malaysia, are (1) use a ship that will take 32 days at a cost of $3,370, or (2) truck the parts to Los Angeles and then ship at a total cost of $5,180. The second option will take only 20 days. You are paid via a letter of credit the day the parts arrive. Your holding cost is estimated at 30% of the value per year. If you have a third option and it costs only $4,440 and also takes 20 days, what is your most economical plan? The daily holding cost of Alternative 1 is $ 79.70 . (Enter your response rounded to two decimal places.) The daily cost of faster shipping with Alternative 2 is $ 150.83. (Enter your response rounded to two decimal places.) The daily cost of faster shipping with Alternative 3 is $ (Enter your response rounded to two decimal places.)
Emery Pharmaceutical uses an unstable chemical compound that must be kept in an environment where both temperature and humidity can be controlled. Emery uses 825 pounds per month of the chemical, estimates the holding cost to be 50% of the purchase price (because of spoilage), and estimates order costs to be $46 per order. The cost schedules of two suppliers are as follows: Vendor 1 Vendor 2 Quantity Price/lb Quantity Price/lb 1-499 $17.00 1-399 $17.10 500-999 $16.75 400-799 $16.85 1,000+ $16.50 800-1,199 $16.60 1,200+ $16.25 This exercise contains only parts a, b, and c. a) What is the economic order quantity for each supplier? For Vendor 1 at $17.00/pound, the economic order quantity is enter your response…
Your options for shipping $103,810 of machine parts from Baltimore to Kuala Lumpur, Malaysia, are (1) use a ship that will take 29 days at a cost of $3,670, or (2) truck the parts to Los Angeles and then ship at a total cost of $4,970. The second option will take only 18 days. You are paid via a letter of credit the day the parts arrive. Your holding cost is estimated at 30% of the value per year. If you have a third option and it costs only $4,030 and also takes 18 days, what is your most economical plan? The daily holding cost of Alternative 1 is $ (Enter your response rounded to two decimal places.)
Your options for shipping $100,000 of machine partsfrom Baltimore to Kuala Lumpur, Malaysia, are ( I) use a shipthat will take 30 days at a cost of $3,800 or (2) truck the pa rts toLos Angeles and then ship at a total cost of $4,800. The secondoption will take only 20 days. You are paid via a Jetter of creditthe day the parts arrive. Your holding cost is estimated at 30%of the value per year.a) Which option is more economical?b) What customer issues are not included in the data presented?
You are a purchasing manager in charge of stocking a certain type of product. Weekly demand for these products is normally distributed, with a mean of 100 and a standard deviation of 50. Holding costs are 25%, and you must hold a level of inventory corresponding to a cycle service level of 95%. You are faced with two suppliers, QUALITY Products and BEST Products, who offer the following terms. QUALITY sells the products for €5,000 with a minimum order of 100, and a lead time of 1 week with a standard deviation of 0.1 week. BEST sells the transformer for €4,800, has a minimum batch of 1,000, a lead time of 5 weeks, and a lead-time standard deviation of 4 weeks. If you could use both suppliers, how would you structure your orders? Describe the dimensions of supplier performance that affect total cost