Operations Management: Processes and Supply Chains (12th Edition) (What's New in Operations Management)
12th Edition
ISBN: 9780134741062
Author: Lee J. Krajewski, Manoj K. Malhotra, Larry P. Ritzman
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 12, Problem 3P
A
Summary Introduction
Interpretation: Total inventory in weeks of supply is to be calculated.
Concept Introduction: Average inventory is the average value of specific goods within a particular time period. It may vary from the median. It is calculated by averaging the sum of the number of points within the starting and ending values.
B
Summary Introduction
Interpretation: Total inventory should be calculated in inventory turns.
Concept Introduction: Average inventory is the average value of specific goods within a particular time period. It may vary from the median. It is calculated by averaging the sum of the number of points within the starting and ending values.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Dara Jones, operations manager of Arrow Distributing Corp., likes to track inventory
by using weeks of supply as well as by inventory turnover.
Arrow Distributing Corp.
Net Revenue
$16,680
Cost of sales
$13,980
Inventory
$1,020
Total assets
$8,360
a) What is its weeks of supply?
decimal places).
weeks (round your response to two
b) What percentage of Arrow's assets are committed to inventory?
response as a percentage rounded to two decimal places).
c) What is Arrow's inventory turnover?
decimal places).
% (enter your
times per year (round your response to two
d) Suppose a manufacturer has an inventory turnover of 13.5 times per year. Arrow's
supply chain performance relative to the manufacturer's, as measured by
inventory turnover, is
better
worse
the same
4. From the information given find the overall food
cost. (Show all workings).
Items
Sales
Hot Dog
45.2
Ice Tea
15.3
Wedges
22.4
Sale
Percent of Food Cost
$375.
1% of Dollar
35.0
$220
22.0
$350
24.0
$212
Beverages
17.1
Total
30.0
$1157
100.0
Imagine that you own a bakery! Your bakery sells cookies and brownies only. To run your bakery successfully, you must determine the production cost for each item, as well as, your maximum production cost for each day. Create a business plan for your bakery! Your business plan must include the following:
• The cost to produce a cookie
• The cost to produce a brownie
• Your maximum production costs per day
• The system of inequalities that describes these restrictions
• A graph of your system including the shaded solution region
Chapter 12 Solutions
Operations Management: Processes and Supply Chains (12th Edition) (What's New in Operations Management)
Knowledge Booster
Learn more about
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
- Davidson Corp. produces a single product: fireproof safety deposit boxes for home use. The budgetgoing into the current year anticipated a selling price of $55 per unit. Because of competitive pressures, the company had to cut selling prices by 10% during the year. Budgeted variable costs per unitare $32, and budgeted total fixed costs are $156,000 for the year. Anticipated sales volume for theyear was 10,000 units. Actual sales volume was 5% less than budget. (1) What was the sales pricevariance for the year? (Round your answer to the nearest whole dollar.) (2) Label this variance F(favorable) or U (unfavorable), as appropriatearrow_forwardWhat does sales and operations planning serve? Explain the S&OP procedure?arrow_forwardTHSHT Pritchett's Precious Time Pieces PATOG Bill's company, Pritchett's Precious Time Pieces, buys, sells, and repairs old clocks and clock parts. Bill sells rebuilt springs for a price per unit of $10. The fixed cost of the equipment to build the springs is $1,000. The variable cost per unit is $5 for spring material. Required: Create a quantitative analysis model to determine the company's profit, and answer the following: 1. How much would the company's profit/(loss) be if they were unable to sell anything? 2. How much would the company's profit/(loss) be if they sold 400 units? 3. How many units do the company need to sell to break-even?arrow_forward
- Sticky Fingers Inc. produces packing and masking tape. Last year’s annual report has been compiled, and you are in charge of business analysis for the year. The company had a goal for inventoryturnover of 6 for last year. The actual results were cost of goods sold of $400,000, beginning inventory of $50,000, and ending inventory of $70,000. What was the actual inventory turnover, and atwhat percent did the firm achieve its goal?arrow_forwardJenna Baker, CEO of Baker Mfg Inc., wishes to compare her company's inventory turnover to those of industry leaders, who have turnover of about 13 times per year and 8% of their assets invested in inventory. a) What is Baker's inventory turnover? Baker Mfg. Inc. Net Revenue Cost of sales Inventory Total assets $27,500 $19,850 $1,290 $17,410 times per year (round your response to two decimal places).arrow_forwardDogs-R-Us and K-9, Inc. are two retail stores that cater to the needs of dog owners in the greater Charleston area. There is healthy competition between these two establishments. Both operate 52 weeks a year and both sell approximately the same type and dollar value of items. Table provides the cost of goods sold, the average inventory level, and unit value of each item sold in the two stores.a. Compare the two retail stores in terms of average aggregate inventory value.b. Compare the two retail stores in terms of weeks of supply.c. Compare the two retail stores in terms of inventory turnover.arrow_forward
- Henri of Henri’s French Cuisine (HFC), a chain of twelverestaurants, is trying to decide if it makes sense to outsource thepurchasing function. Currently, Henri employs two buyers at anannual fi xed cost of $85,000. Henri’s estimates that the variablecost of each placed purchase order is $15. Value-Buy (VB), a groupof purchasing specialists, will perform the purchasing functionfor a fi xed annual fee of $100,000 plus $5 for each purchase orderplaced. Last year, HFC placed 1450 purchase orders.(a) Construct a base-case spreadsheet model that shows bothof these alternatives side-by-side. Use the same number oforders (stored in a single cell) to drive the calculations.(b) Using last year’s quantity of purchase orders, whichalternative would have been the better?(c) Use Goal Seek to fi nd the indiff erence point (where totalcosts are equal) between these two alternatives. (Hint: GoalSeek can work only with a single “Set cell.” Create a cell inyour model that computes the diff erence…arrow_forwardSubject: Logistic management Q): Calculate ROI if profit margin is 12% and Asset turn over ratio is 1.4? Q): calculate ReOrder Point if lead time is 9 days and daily usage is 20 tons?arrow_forwardThe King Corporation has ending inventory of $386,735, and cost of goods sold for the year just ended was $4,981,315. a. What is the inventory turnover? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. What is the days' sales in inventory? (Use 365 days a year. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c. How long on average did a unit of inventory sit on the shelf before it was sold? (Use 365 days a year. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a. Inventory turnover times b. Days' sales in inventory days C. Inventory days on shelf daysarrow_forward
- As a Program Manager, you have been asked to evaluate a furniture manufacturer’s cash to cash conversion cycle under the following assumptions: sales of $23.5 million, cost of goods sold of 420.8 million, 50 operating weeks a year, total average on hand inventory of $2,150,000, accounts receivable equal to $2,455,000, and accounts payable of $3,695,000. What do you conclude? What recommendations can you make to improve performance? What would be the impact of reducing the accounts payable from $3,695,000to $2,000,000 and all other data remained the same? Please show in detail these impacts quantitatively in your answers.arrow_forwardKamal Fatehl production manager of Kennesaw Manufacturing, finds his profit at $28,600 (as shown in the statement below) inadequate for expanding his business. The bank is insisting on an improved profit picture prior to approval of a loan for some new equipment. Kamal would like to improve profit line to $38,600 so he can obtain the bank's approval for the loan. Sales Cost of supply chain purchases Other production costs Fixed costs Profit 260,000 169,000 36,400 26,000 28,600 % of sales 100% 65% 14% 10% 11% a) What percentage improvement is needed in a supply chain strategy for profit to improve to $38,600? What is the cost of material with a $38,600 profit? % in supply-chain costs is required to yield a profit of $38,600, for a new cost of supply chain A decrease of purchases of $ (Enter your response for the percentage decrease to one decimal place and enter your response for the new supply chain cost as a whole number.) b) What percentage improvement is needed in a sales strategy…arrow_forwardPlease provide answers to subparts d to J: Company B is a retailer of mobile phones in Australia that works 250 days in a year. The manager is determining a minimum-cost inventory plan for an upcoming phone to be launched in the market. She has collected the following information: • Annual demand: 1000 phones • Phone cost: $1,214 each • Phone RRP: $1,349 each • Net weight: 163 g each • Tare weight: 277 g each • Annual inventory holding cost: 15% • Cost per order to replenish inventory: $75 • Annual in-transit holding cost: 10% • Freight rate: $8.10 per kg • Time to process order for freight: 1 days • Freight transit time: 3 days Solve this problem using a non-linear programming (NLP) model to determine the followings: d. The total cost for holding the inventory e. The total cost for transportation f. The total cost for holding the phones during transit g. The total cost for this inventory plan h. The number of orders i. Ordering point j. The profit from this inventory planarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
