OPERATIONS MANAGEMENT LL W/CONNECT CODE
2nd Edition
ISBN: 9781266520037
Author: CACHON
Publisher: MCG CUSTOM
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Chapter 10, Problem 12CQ
Summary Introduction
To determine: Whether the given statement is true or false.
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Which of the following is an element of inventory holding costs?
All of these are elements of inventory holding costs.
investment costs
housing costs
material handling costs
pilferage, scrap, and obsolescence
The Vendor MI is a special concept of restocking and replenishing the inventory that originated in retail business, the line of business where stock availability is a significant if not a crucial factor of company´s success. With VMI, the vendor takes responsibility for inventory management at the buyer side. Select one: a. False b. True
Medtronic sells medical devices. The company enjoys many growth opportunities, and so it measures its inventory holding cost at the rate of 25% per year. It currently turns over its inventory 3 times per year. Its gross margin (the difference between revenue and cost) as a percentage of its revenue is an enviable 65%.
a. For an item that costs Medtronic $600 to produce, what would be the cost ($s) to hold this item for one year in inventory?
b. For an item that costs Medtronic $350 to produce, what is the cost to hold it in inventory ($s)? (Assume it remains in inventory for the average amount of time for the company.)
Chapter 10 Solutions
OPERATIONS MANAGEMENT LL W/CONNECT CODE
Ch. 10 - It is costly to hold inventory, but inventory can...Ch. 10 - A delivery truck from a food wholesaler has just...Ch. 10 - Prob. 3CQCh. 10 - Prob. 4CQCh. 10 - Prob. 5CQCh. 10 - Prob. 6CQCh. 10 - Prob. 7CQCh. 10 - Prob. 8CQCh. 10 - Prob. 9CQCh. 10 - Prob. 10CQ
Ch. 10 - Prob. 11CQCh. 10 - Prob. 12CQCh. 10 - Prob. 13CQCh. 10 - Prob. 14CQCh. 10 - Prob. 1PACh. 10 - Prob. 2PACh. 10 - Prob. 3PACh. 10 - An electronics manufacturer has 25 days-of-supply...Ch. 10 - Prob. 5PACh. 10 - Prob. 6PACh. 10 - Prob. 7PACh. 10 - Prob. 8PACh. 10 - Prob. 9PACh. 10 - Prob. 10PACh. 10 - Prob. 11PACh. 10 - Prob. 12PACh. 10 - A retailer has annual sales of 500,000 and an...Ch. 10 - An online shoe retailers annual cost of holding...Ch. 10 - Prob. 15PACh. 10 - Prob. 16PACh. 10 - Prob. 17PACh. 10 - Prob. 18PACh. 10 - Prob. 19PACh. 10 - Prob. 1CCh. 10 - Prob. 3CCh. 10 - Prob. 4C
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, operations-management and related others by exploring similar questions and additional content below.Similar questions
- A customer buys 1 ABC Jan 35 put for a premium of $3 and simultaneously buys 100 shares of ABC stock for $35 per share. The customer will break even when the stock is selling for what price per share at expiration?arrow_forwardAn integrated circuit manufacturer’s annual cost of holding inventory is 48 percent.What inventory holding cost (in $) does it incur for an item that costs $300 and has aone-month supply of inventory on average?arrow_forwardItem X is a standard item stocked in a company's inventory of component parts. Each year the firm, on a random basis, uses about 1,800 of item X, which costs $25 each. Storage costs, which include insurance and cost of capital, amount to $14 per unit of average inventory. Every time an order is placed for more item X, it costs $18. What is the annual cost for ordering item X?arrow_forward
- Give typing answer with explanation and conclusionarrow_forwardThe principal goal of inventory management systems is to balance the costs of ordering, shipping, and receiving goods with the cost of carrying those goods, while simultaneously meeting the firm's policy with respect to avoiding running short of stock and disrupting production schedules. True Falsearrow_forwardDo not use Aiarrow_forward
- Please solve very soon completely all partsarrow_forwardIs proper cost of storage is necessary? 1-True 2-Falsearrow_forwardThe injection molding department of a company uses an average of 30 gallons of special lubricanta day. The supply of the lubricant is replenished when the amount on hand is 170 gallons. It takesfour days for an order to be delivered. Safety stock is 50 gallons, which provides a stockout risk of9 percent. What amount of safety stock would provide a stockout risk of 3 percent? Assumenormality.arrow_forward
- The Bosch factory in New Bern, NC uses dishwasher motors at a steady rate of 17308 units per year. Bosch procures these units from a supplier at a purchase cost of $58 per unit. Bosch receives an order 26 days after it is placed. Regardless of the number of units ordered, Bosch incurs a fixed cost of $2988 for placing, shipping, and receiving the order. The holding cost per unit per year is 30% of the purchase cost per unit. Assume Bosch operates 364 days, 52 weeks, or 12 months per year. Calculate the average time a unit spends in inventory between orders in DAYS for the optimal order quantity from the problem above. Rounding instructions • Carry your calculations to at least 3 decimal places. • Enter your answer rounded to one decimal place (nearest tenth).arrow_forwardInventory holding costs are the costs of storing products until they are purchased or shipped to customers.; True or Falsearrow_forwardABC analysis is based on the presumption that carefully controlling all items is necessary to produce important inventory savings. A True B Falsearrow_forward
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