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
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Question
Chapter 12, Problem 4P
Summary Introduction
Interpretation: The average value of inventory that is being held needs to be discussed.
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.
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Bhatti Company produces plastic photo frames. Two departments, molding and finishing, are involved in the
manufacturing. The molding department fills the molds with hot liquid plastic that is left to cool and then opens
them. The finishing department removes the plastic frame from the mold and strips the edges of the frames of extra
plastic.
The following information is available for the month of January:
January 1
Quantity
(pounds)
January 31
Quantity
(pounds)
Work-in-Process Inventory
Cost
Cost
Molding department
Finishing department
None
None
5,000
$ 15,000
2,000
The WIP Inventory in the finishing department is estimated to be 40% complete for conversion both at the
beginning and end of January. Costs of production for January follow:
Direct
Costs of Production
Materials
Conversion
Molding department
Finishing department
$ 450,000
$ 90,000
80,290
The molding department started 50,000 pounds of product in January. The firm uses the FIFO method of process
costing.
Required:
1. Prepare…
The Eagle Machine Company averaged $2 million in inventory last year, and the cost of goods sold was $10 million. Figure 12.5 shows the breakout of raw materials, work-in-process, and finished goods inventories. The best inventory turnover in the company’s industry is six turns per year. If the company has 52 business weeks per year, how many weeks of supply were held in inventory? What was the inventory turnover? What should the company do?
2) Life Cycle Assessment of Glass. Inventory Analysis
Determine, as an example, the second phase (Inventory Analysis) of the Life Cycle Assessment of the glass used for the manufacture of soda bottles.
Chapter 12 Solutions
Operations Management: Processes and Supply Chains (12th Edition) (What's New in Operations Management)
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- Why does inventoryflow so quickly through a Frito-Lay plant?arrow_forwardCyberphone, a manufacturer of cell phone accessories, ended the current year with annual sales (at cost) of $72 million. During the year, the inventory of accessories turned over eight times. For the next year, Cyberphone plans to increase annual sales (at cost) by 18 percent. a. What is the increase in the average aggregate inventory value required if Cyberphone maintains the same inventory turnover during the next year? $nothing. (Enter your response as an integer.) b. What change in inventory turns must Cyberphone achieve if, through better supply chain management, it wants to support next year's sales with no increase in the average aggregate inventory value? nothing turns. (Enter your response rounded to one decimal place.)arrow_forwardOver the past 5 weeks, demand for wine at Winston's Winery has averaged 1,940 bottles, and the variance of demand has been 874,250 bottles. Winston has ordered an average of 1,940 bottles per week over that time period, with a variance of orders of 1,941,750 bottles. a) The bullwhip measure for glass bottles for Winston's Winery is ___ b) Winston winery is providing _____ in its supply chain. -an amplification effect -a smoothing effectarrow_forward
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