Operations Management
17th Edition
ISBN: 9781259142208
Author: CACHON, Gérard, Terwiesch, Christian
Publisher: Mcgraw-hill Education,
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Chapter 11, Problem 13CQ
Summary Introduction
To identify: The feature that would provide the support to make the production in the high-cost location.
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Sorlini Pasta sells pasta throughout Italy. Which of the following is the strongest evidence that Sorlini Pasta is suffering from the bullwhip effect?a. They hold a considerable amount of inventory, enough to satisfy their average demandfor the next four weeks.b. Just before a snowstorm in the northern part of the country, sales of pasta increasedconsiderably.c. Sorlini sells both fresh and dry pasta products through different types of retailers.d. Most retailers only carry a subset of all of the pastas Sorlini offers.e. The volatility of the orders Sorlini receives from its distributors is greater than thevolatility of pasta demand at retailers.f. Pasta consumption per capita in southern Italy is higher than in northern Italy.
A company is deciding whether to produce a new gadget at a plant located in a countryclose to consumers at a higher labor cost and shorter lead time or to outsource it to a country with a low labor cost but a longer lead time. All else being equal, which of the following considerations would provide the most support to produce in the high-cost location?a. The holding costs per unit are low.b. Transportation costs per unit per km are low.c. The in-stock probability requirement for the product is high.d. Customers are willing to wait for delivery
A company buys an item for €50 and sells it for €75.The annual sales and average stock of this item is 10000 units and1600 units, respectively; while the carrying cost is 20 percent of itsacquisition cost. Calculate:a) inventory turnoverb) weeks of supplyc) annual gross profitd) average investment in stocke) annual inventory carrying costWould the company operate more efficiently, if average stock isreduced to 1000 units?
Chapter 11 Solutions
Operations Management
Ch. 11 - Prob. 1CQCh. 11 - Prob. 2CQCh. 11 - Prob. 3CQCh. 11 - Prob. 4CQCh. 11 - Prob. 5CQCh. 11 - Prob. 6CQCh. 11 - Prob. 7CQCh. 11 - Prob. 8CQCh. 11 - Prob. 9CQCh. 11 - Prob. 10CQ
Ch. 11 - Prob. 11CQCh. 11 - Prob. 12CQCh. 11 - Prob. 13CQCh. 11 - Over time, consumers have less of a need for a...Ch. 11 - For 10 percent of the products in a category, a...Ch. 11 - Anvils Works requires, on average, 2800 tons of...Ch. 11 - Prob. 3PACh. 11 - Prob. 1CCh. 11 - Prob. 2CCh. 11 - Rob Honeycutt created Timbuk2 to offer consumers...
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- Milling companies have loads of requirements for their warehouses 1, 2, and 3 from their clients A, B, and C. Identify which among the stepping stone and MODI distribution methods proves to be cost-saving for the company. (Please provide solutions and explanation)arrow_forward13. Nestle Ltd. It produces its premium plant food in 40 Kg bags. Demand is 100,000 Kgs. per week and the plant operates 52 weeks each year. Nestle can produce 250,000 Kgs. per week. The setup cost is OMR 200 and the annual holding cost rate is OMR 0.550 per bag. What should be the optimal production quantity? Round - up to the nearest integer ? a. 12553 b. None is correct c. 11228 d. 10902 e. 11010arrow_forwardA manager at Strateline Manufacturing must choose between two shipping alternatives: two-day freight and five-day freight. Using five-day freight would cost $180 less than using two-day freight. The primary consideration is holding cost, which is $8 per unit a year. 2,300 items are to be shipped. Which alternative would you recommend?arrow_forward
- David Alexander has compiled the following table of six itemsin inventory at Angelo Products, along with the unit cost andthe annual demand in units:IDENTIFICATION CODE UNIT COST ($) ANNUAL DEMAND(UNITS)XX1 5.84 1,200B66 5.40 1,1103CPO 1.12 89633CP 74.54 1,104R2D2 2.00 1,110RMS 2.08 961 Use ABC analysis to determine which item(s) should be care-fully controlled using a quantitative inventory technique and which item(s) should not be closely controlled.arrow_forwardQUESITON 26 Calculate the percentage of assets committed to inventory, where Panda lnc has $44,000,000 in total assets and 11,400,000 of inventory. QUESITON 27 Supply chain management is ... A.a set of procedures connecting suppliers to customers B.Design, operation and improvement of productive systems C.A sequence of activities across organizations that are involved in producing and delivering a product or service D.a series of activities from suppliers to customers that add value to a product or service QUESITON 28 SCOR stands for A.Supply Chain Operations Reference model B.Supply Chain Operations Resilience C.Supply Chain Organsational Resources D.arrow_forwardSY Manufacturers (SYM) is producing T-shirts in three colors: red, blue, and white. The monthly demand for each color is 3,000 units. Each shirt requires 0.5 pounds of raw cotton that is imported from Luft-Geshfet-Textile (LGT) Company in Brazil. The purchasing price per pound is $2.50 (paid only when the cotton arrives at SYM’s facilities) and transportation cost by sea is $0.20 per pound. The traveling time from LGT’s facility in Brazil to the SYM facility in the United States is two weeks. The cost of placing a cotton order, by SYM, is $100 and the annual interest rate that SYM is facing is 20 percent. a. What is the optimal order quantity of cotton?b. How frequently should the company order cotton?c. Assuming that the first order is needed on April 1, when should SYM place the order?d. How many orders will SYM place during the next year?e. What is the resulting annual holding cost?f. What is the resulting annual ordering cost?g. If the annual interest cost is only 5 percent, how…arrow_forward
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