A
Interpretation: The number of breakers need per year by Equipment Company
Concept Introduction: Decision making is a process of determining the alternative option to a given situation. It reaches the most suitable option for action. During decision making, the factors and some uncertainties are taken to consider.
B
Interpretation: The number of breakers need per year by ESE Company
Concept Introduction: Decision making is a process of determining the alternative option to a given situation. It reaches the most suitable option for action. During decision making, the factors and some uncertainties are taken to consider.
C
Interpretation: The least costly option
Concept Introduction: Decision making is a process of determining the alternative option to a given situation. It reaches the most suitable option for action. During decision making, the factors and some uncertainties are taken to consider.
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Chapter 12 Solutions
Operations Management: Processes and Supply Chains (12th Edition) (What's New in Operations Management)
- Scenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing expenditures for packaging materials with Jeff Joyner. Ben was particularly disturbed about the amount spent on corrugated boxes purchased from Southeastern Corrugated. Ben said, I dont like the salesman from that company. He comes around here acting like he owns the place. He loves to tell us about his fancy car, house, and vacations. It seems to me he must be making too much money off of us! Jeff responded that he heard Southeastern Corrugated was going to ask for a price increase to cover the rising costs of raw material paper stock. Jeff further stated that Southeastern would probably ask for more than what was justified simply from rising paper stock costs. After the meeting, Ben decided he had heard enough. After all, he prided himself on being a results-oriented manager. There was no way he was going to allow that salesman to keep taking advantage of Coastal Products. Ben called Jeff and told him it was time to rebid the corrugated contract before Southeastern came in with a price increase request. Who did Jeff know that might be interested in the business? Jeff replied he had several companies in mind to include in the bidding process. These companies would surely come in at a lower price, partly because they used lower-grade boxes that would probably work well enough in Coastal Products process. Jeff also explained that these suppliers were not serious contenders for the business. Their purpose was to create competition with the bids. Ben told Jeff to make sure that Southeastern was well aware that these new suppliers were bidding on the contract. He also said to make sure the suppliers knew that price was going to be the determining factor in this quote, because he considered corrugated boxes to be a standard industry item. Is Ben Gibson acting legally? Is he acting ethically? Why or why not?arrow_forwardScenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing expenditures for packaging materials with Jeff Joyner. Ben was particularly disturbed about the amount spent on corrugated boxes purchased from Southeastern Corrugated. Ben said, I dont like the salesman from that company. He comes around here acting like he owns the place. He loves to tell us about his fancy car, house, and vacations. It seems to me he must be making too much money off of us! Jeff responded that he heard Southeastern Corrugated was going to ask for a price increase to cover the rising costs of raw material paper stock. Jeff further stated that Southeastern would probably ask for more than what was justified simply from rising paper stock costs. After the meeting, Ben decided he had heard enough. After all, he prided himself on being a results-oriented manager. There was no way he was going to allow that salesman to keep taking advantage of Coastal Products. Ben called Jeff and told him it was time to rebid the corrugated contract before Southeastern came in with a price increase request. Who did Jeff know that might be interested in the business? Jeff replied he had several companies in mind to include in the bidding process. These companies would surely come in at a lower price, partly because they used lower-grade boxes that would probably work well enough in Coastal Products process. Jeff also explained that these suppliers were not serious contenders for the business. Their purpose was to create competition with the bids. Ben told Jeff to make sure that Southeastern was well aware that these new suppliers were bidding on the contract. He also said to make sure the suppliers knew that price was going to be the determining factor in this quote, because he considered corrugated boxes to be a standard industry item. As the Marketing Manager for Southeastern Corrugated, what would you do upon receiving the request for quotation from Coastal Products?arrow_forwardUnioil produces vegetable based cooking oil and butter spreads. Unioil uses large quantities of crude palm oil (CPO)in its production process as a main raw material. It is April 2021 now and Unioil estimates a need of 25,000 metric tons (MTs)of CPO in September 2021. Current spot price of CPO is RM2200 per MT. You as the procurement manager of Unioil, have the following alternatives to hedge the possible increase in the CPO price by September 2021: a) The analysist predicts that the CPO will be trading at RM3400 per MT in September 2021. b) Forward contracts on CPO for September 2021 delivery is available at RM3600 per MT. C) September 2021 Futures contract on CPO (FCPO) is available and currently trading at RM2280 per MT. (FCPO has a contract specification of 25 metric tons per contract). What would be your net purchase price in September 2021 if the CPO closing price in September 2021 is RM3500 per MT? Justify whether this is a perfect hedge? d) European Options on September…arrow_forward
- Rao Technologies, a California-based high-techmanufacturer, is considering outsourcing some of its electron-ics production. Four firms have responded to its request forbids, and CEO Mohan Rao has started to perform an analy-sis on the scores his OM team has entered in the table below. Weights are on a scale from 1 through 30, and the outsourc-ing provider scores are on a scale of 1 through 5. The weightfor the labor factor is shown as a w because Rao’s OM teamcannot agree on a value for this weight. For what range ofvalues of w, if any, is company C a recommended outsourcingprovider, according to the factor-rating method?arrow_forwardDeere & Company (brand name John Deere) is famed for the manufacture and supply of machineryused in agriculture, construction, and forestry, as well as diesel engines and lawn care equipment. In2014, Deere & Company was listed 80th in the Fortune 500 America’s ranking and was 307th in the2013 Fortune Global 500 ranking. Supply Chain Cost Reduction Challenges: Deere and Company has a diverse product range, whichincludes a mix of heavy machinery for the consumer market, and industrial equipment, which is made toorder. Retail activity is extremely seasonal, with the majority of sales occurring between March and July. The company was replenishing dealers’ inventory weekly, using direct shipment and cross-dockingoperations from source warehouses located near Deere & Company’s manufacturing facilities. This operation was proving too costly and too slow, so the company launched an initiative to achieve a 10%supply chain cost reduction within four years. The Path to Cost…arrow_forwardConsider the following scenario for Ryan's Unique DooDad Integrated Supply Chain: a multi-tiered supply chain consisting of a Wholesaler (W), a Retailer (R), and a Manufacturer (M). The Wholesaler supplies a product to a Retailer (R), which, in turn, sells the product to end Customers (C). C pays R $9.50 per unit. R pays W $6.00 per unit. W pays the Manufacturer (M) $2.90 per unit. The costs to M are $1.40/unit. Note THE ANSWER IS % 95.29 PLEASE EXPLAIN IN DETAIL Use the Newsvendor Model to determine answer The optimal service level for the integrated supply chain is 51.72% 97.59% 42.17% 48.52% 77.76% 95.29%arrow_forward
- Purchasing and Supply Chain ManagementOperations ManagementISBN:9781285869681Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. PattersonPublisher:Cengage Learning