Operations Management
17th Edition
ISBN: 9781259142208
Author: CACHON, Gérard, Terwiesch, Christian
Publisher: Mcgraw-hill Education,
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Chapter 12, Problem 9CQ
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To explain: The factor that supports the most in accepting the deal.
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All of the following statements concerning shortage costs are true Except:
Shortage costs include loss of goodwill, loss of a sale, loss of a customer, loss of profits, and late penalties
Shortage costs are difficult or impossible to measure with any accuracy
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It is the cost of having no items in the inventory when it is needed by customers
Misu Sheet, owner of the Bedspread Shop, knows his customers will pay no more than $120 for a comforter. Misu wants a 30% markup on selling price. What is the most that Misu can pay for a comforter?
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Operations Management
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- You need to replace your dryer. Both a big box store and a local appliance dealer are selling a dryer for the same price. Which of the following alternatives has a relevant benefit? A big box store offers free expedited delivery, making its delivery date the same as a local appliance dealer. The price for a dryer from a local appliance dealer includes a repair warranty on the dryer. Both the local appliance dealer and the big box store offer a free haul away service for your old dryer. Both the local appliance dealer and the big box store offer compatible warranty coverage.arrow_forwardOperation mangement An online shoe retailer's annual cost of holding inventory is 30 percent. The firm operates with a days-of-supply of 23 days, and assume there are 365 days per year. What is the inventory holding cost (in $s) for a pair of shoes that the firm purchased for $53 ? Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.arrow_forwardTyrelle's T-shirts purchases shirts for $4. If a markup of $5 per shirt is applied, the selling price for each shirt is $9. True Falsearrow_forward
- Please do not give solution in image formate thanku Which of the following is a method to improve cash-to-cash conversion (CCC)?Increasing payment terms from customersIncreasing inventory safety stockDecreasing payment terms from customersDecreasing payment terms from suppliersarrow_forwardYou can sell 60 pet chia per week if they are marked as $1 each , but only 50 per week if they are marked $2 per chia. Your chia supplier is prepared to sell you 10 chias per weekif they are marked $1 per chia, and 20 per week if they are marked $2 per chia. At what price should the chias be marked so that there is neither surplus nor a shortage of chias?arrow_forward14. 12 The purchasing manager for the Atlantic Steel Company must determine a policy for ordering coal to operate 12 converters. Each converter requires exactly 5 tons of coal per day to operate, and the firm operates 360 days per year. The purchasing manager has determined that the ordering cost is $80 per order and the cost of holding coal is 20% of the average dollar value of inventory held. The purchasing manager has negotiated a contract to obtain the coal for $12 per ton for the coming year. a. Determine the optimal quantity of coal to receive in each order. (Ans: 1200 tons) b. Determine the total inventory-related costs associated with the optimal ordering policy (do not include the cost of the coal). (Ans: TC= $2880) c. If 5 days of lead time are required to receive an order of coal, how much coal should be on hand when an order is placed? (Ans= R=300 tons)arrow_forward
- 13. Which of the following orders is most useful to short sellers who want to limit their potential losses? a. limit order b. discretionary order c. limit loss order d. stop buy order e. none of thesearrow_forwardAfter much anticipation Goople releases a new smartphone. In anticipation of the new phone, Goople's stock price increases. However, once launched, the smartphone does even more than what was anticipated and buyers are buying all of the phones available. Goople's phones are on back order for 8 months. The unexpectedly positive reaction to the smartphone would raise the present value and the price of the corporation's stock. raise the present value and reduce the price of the corporation's stock. reduce the present value and the price of the corporation's stock. reduce the present value and raise the price of the corporation's stock.arrow_forwardThat One Book sells its books through The Witch and the Wardrobe bookstores. It costs That One Book $0.80 to print each book; it sells the book to The Witch and the Wardrobe for $2.50. The Witch and the Wardrobe then sells the books at retail for $6.00. Whatever doesn’t sell gets thrown away. Demand for the book each issue is normal with a mean of 5219 and a standard deviation of 1610. To give The Witch and the Wardrobe incentive to order more books, it proposes a revenue-sharing contract. Instead of selling the book to The Witch and the Wardrobe for $2.50, That One Book will sell its books to The Witch and the Wardrobe for only $1.00. However, for each book that The Witch and the Wardrobe sells at retail, The Witch and the Wardrobe must give $2.00 back to That One Book. With this revenue sharing agreement in place, what is the optimal order amount that will maximize The Witch and the Wardrobe expected profit? Please do fast ASAParrow_forward
- Which one of the following represent FIFO method of inventory evaluation? a. Old merchandise is sold first b. Average number of goods are sold c. Old items remain in inventory d. New merchandise is sold firstarrow_forwardPrior to accepting a customer’s order, a company should verify the amount of inventory on hand. Which of the following is not a reason to do this? Determine whether inventory records are accurate. Ensure accuracy of inventory records by reducing the amount by items order. Identify which products should be ordered from suppliers. Communicate to the customer when shipment will be sent.arrow_forwardA supplier has come to you and offered the following deal. If you buy 29 or fewer cases of cleaning solution, the cost will be $25 for each case. If you buy 30 or more cases, the cost will be $20 per case. Assume your cost of carrying inventory is 15 percent a year, it costs $20 for you to order the material, and you use 50 cases per year.a. How many cases should you order?b. Would you negotiate with this supplier for a further discount? Explain the quantities and prices that you would negotiate for and why those quantities and prices are selected.arrow_forward
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