OPERATIONS MANAGEMENT IN THE SUPPLY CHAIN: DECISIONS & CASES (Mcgraw-hill Series Operations and Decision Sciences)
7th Edition
ISBN: 9780077835439
Author: Roger G Schroeder, M. Johnny Rungtusanatham, Susan Meyer Goldstein
Publisher: McGraw-Hill Education
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Chapter 14, Problem 5P
The famous Widget Company sells widgets at the rate of 80,000 units per year. Each widget sells for $100, and it costs 30 percent to carry widgets in inventory for a year. The process of widget production has been automated over the years, and it now costs $1000 to change over the widget production line to other products that are made on the same line.
- a. What is the economical lot size for the production of widgets?
- b. How many lots will be produced each year?
- c. What are the annual cost of carrying widgets and the annual cost of changeover?
- d. What factors or changes in assumptions might cause the Widget Company to produce a larger lot than the economic lot size calculated in part a?
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The average expense of keeping inventory for an integrated circuit producer is 48 percent.What inventory keeping expense (in $) does an object cost $300 and has an estimated one-month inventory supply?
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Chapter 14 Solutions
OPERATIONS MANAGEMENT IN THE SUPPLY CHAIN: DECISIONS & CASES (Mcgraw-hill Series Operations and Decision Sciences)
Ch. 14.S - eXcel Suppose that for problem 1 in the chapter,...Ch. 14.S - Prob. 2PCh. 14.S - For problem 2 in the chapter, suppose the Grinell...Ch. 14.S - A producer of electronic parts wants to take...Ch. 14 - Identify the different types of inventories (raw...Ch. 14 - Why are stockout costs difficult to determine?...Ch. 14 - What is the difference between a requirements...Ch. 14 - Compare and contrast the management of finished...Ch. 14 - For a given service level, why does a P system...Ch. 14 - Under what circumstances might CPFR be useful, and...
Ch. 14 - Prob. 7DQCh. 14 - What is the appropriate role of inventory turnover...Ch. 14 - Suppose you are managing a chain of retail...Ch. 14 - The Always Fresh Grocery Store carries a...Ch. 14 - The Grinell Machine Shop makes a line of metal...Ch. 14 - The local Toyota dealer has to decide how many...Ch. 14 - Prob. 4PCh. 14 - The famous Widget Company sells widgets at the...Ch. 14 - Prob. 6PCh. 14 - Prob. 7PCh. 14 - An electronics retailer carries a particular...Ch. 14 - An electronics retailer carries a particular...Ch. 14 - The local Toyota dealer has to decide how many...Ch. 14 - The Suregrip Tire Company carries a certain type...Ch. 14 - The Suregrip Tire Company carries a certain type...Ch. 14 - eXcel 13. The Cover-up Drapery Company carries...Ch. 14 - Suppose you are the supplier of the Cover-up...
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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
- The demand for a particular part called SKU 005 is 1,500 units a year. The cost of one SKU 005 is $64.00. It costs $60.00 to place an order SKU 005, and the user of SKU 005 has a per year inventory carrying cost of 25% of unit cost. Assume that there are 250 working days in the year where SKU 005 is used. Once the purchasing manager for SKU 005 places an order, it always takes the vendor 5 working days to deliver that order. What should the purchasing manager’s reorder point be? ) A. 12 ОВ. 30 Ос. 36 O D. 24 O E. 5arrow_forwardWhich of the following is an element of inventory holding costs? All of these are elements of inventory holding costs. investment costs housing costs material handling costs pilferage, scrap, and obsolescencearrow_forwardFerdows Electronics, Inc. (FEI), produces short runsof custom microwave radios for railroads and other industrial clients.You have been asked to reduce inventory by introducing akanban system. After several hours of analysis, you develop thefollowing data for connectors used in one work cell. How manykanbans do you need for this connector? ~Daily demand = l ,500 radiosProduction lead time = l daySafety stock = l /2 dayKanban size = 250 radiosarrow_forward
- The demand for a particular part called SKU 005 is 1,200 units a year. The cost of one SKU 005 is $40.00. It costs $60.00 to place an order SKU 005, and the user of SKU 005 has a per year inventory carrying cost of 25% of unit cost. Assume that there are 250 working days in the year where SKU 005 is used. Once the purchasing manager for SKU 005 places an order, it always takes the vendor 5 working days to deliver that order. What should the purchasing manager's reorder point be? O A. 24 O B. 36 O C. 30 O D. 5 O E. 12arrow_forwardAn integrated circuit manufacturer’s annual cost of holding inventory is 48 percent.What inventory holding cost (in $) does it incur for an item that costs $300 and has aone-month supply of inventory on average?arrow_forwardIn the A-B-C classification system, items which account for sixty percent of the total dollar-volume for few inventory items would be classified as: O a) A items b) B items c) C items d) e) B items plus C items A items plus B itemsarrow_forward
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- Annual purchasing salaries are $65,000, operating expenses for the purchasingdepartment are $25,000, and inspecting and receiving costs are $25 per order. If thepurchasing department places 9000 orders a year, what is the average cost of ordering? What is the annual cost of ordering?arrow_forwardPlease do not give solution in image format thankuarrow_forwardWhich of the following is not a category of inventory? O A. Raw Materials B. Work-In-Process (WIP) C. Maintenance, Repair, and Operating Supplies (MRO). OD. All of the above are categories of inventoryarrow_forward
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