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.S, Problem 4P
A producer of electronic parts wants to take account of both production rate and demand rate in deciding on its lot sizes. A particular $50 part can be produced at a rate of 1000 units per month, and the demand rate is 200 units per month. The firm uses a earning charge of 24 percent a year, and the setup cost is S200 each time the part is produced.
- a. What lot size should be produced?
- b. If the production rate is ignored, what would the lot size be? How much does this smaller lot size cost the firm 011 an annual basis?
- c. Draw a graph of on- hand inventory versus time.
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When selling price is constant and variable costs increases per unit, what will be the effect to the break-even point in units?
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A supplier provides parts to a manufacturing company that demands frequent deliveries. At the present time it takes six hours to make a round trip between the supplier’s warehouse and the customer, including loading, travel, and unloading time. The lot size is 12 pallet loads on a truck, and the manufacturer uses 2 pallets per hour.a. How many trucks are needed to ship the pallets to the manufacturer?b. What is likely to happen if the truck breaks down?c. How can the supplier ensure that the customer does not run out of parts even in the face of delivery problems or other uncertainties?d. What will happen to the supplier if the manufacturer runs into trouble and shuts down for a period of six hours?
The safety stock on an SKU is set at 500 units. The supplier says it has to increasethe lead time from 4 to 5 weeks. What should be the new safety stock?
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
- A firm wants to justify smaller lot sizes economically.Management knows that it cannot change the cost tocarry one unit in inventory since this is largely basedon the value of the item. To justify a smaller lot size,what must it do?arrow_forwardCarol Cagle bas a repetitive manufacturing plantproducing trailer bitches in Arlington, Texas. The plant has anaverage inventory tu rnover of only 12 times per year. She hastherefore determined that she will reduce her component lotsizes. She has developed the following data for one component,the safety chain clip:Annual demand = 31,200 unitsDaily demand = 120 unitsDaily production (in 8 hours) = 960 unitsDesired lot size (I hour of production) = 120 unitsHolding cost per unit per year = $12Setup labor cost per hour = $20How many minutes of setup time should she have her plant manageraim for regarding this component?arrow_forwardA company has an annual demand for a product of 2000 units, a carrying cost of $20per unit per year, and a setup cost of $100. Through a program of setup reduction,the setup cost is reduced to $20. Run costs are $2 per unit. Calculate:a. The EOQ before setup reduction.b. The EOQ after setup reduction.c. The total and unit cost before and after setup reduction.arrow_forward
- Which of the following is a valid approach to introduce safety stock for dependent demand items? None of the other answer choices are correct. Safety stock is never introduced for dependent demand items A, B, and C are all valid approaches A. Increase the replenishment order by a quantity specified by some estimate of expected plan error B. Add Safety Time into the requirements plan C. Utilize statistical techniques to set safety stocks directly for a dependent demand itemarrow_forwardWhich of the following is ‘data’? i. Number of items in inventory in the store were 3,000 ii. Value of items in the store was OMR 5,000 iii. Total items with value OMR 1,500 to OMR 3,000 were 500arrow_forwardPlease do not give solution in image formate thanku. A company has an annual demand for a product of 2000 units, a carrying cost $20 per unit per year and a setup cost of $100. Through a program of setup reduction. the setup cost is reduced to $20. Run costs are $2 per unit. Calculate: A- The EOQ before setup reduction B- The EOQ after setup reduction C- The total and unit cost before and after setup reductionarrow_forward
- Rick Wing has a repetitive manufacturing plant producing automobile steering wheels. Use the following data to pre-pare for a reduced lot size. The firm uses a work year of 305 days. Annual demand for steering wheels 30,500Daily demand 100Daily production (8 hours) 800Desired lot size (2 hours of production) 200Holding cost per unit per year $10 a) What is the setup cost, based on the desired lot size?b) What is the setup time, based on $40 per hour setup labor?arrow_forwardA company has an annual demand for a product of 2000 units, a carrying cost of $20per unit per year, and a setup cost of $100. Through a program of setup reduction, thesetup cost is reduced to $20. Run costs are $2 per unit. Calculate: The EOQ before setup reduction. The EOQ after setup reduction. The total and unit cost before and after setup reduction.arrow_forwardJ.W. Electronics sells one of its 27-inch screen TV’s for $300. The fixed cost for producing this type of TV is $125 000. The variable cost per unit is $175 a) Based on the above information, what is the break-even point in units? show calculations b. The competition has reduced its price on a similar TV to $275. J.W. Electronics is considering reducing its selling price to $275 to compete. Find the new break-even point if the sales price is reduced to $275. Show your calculations c) Calculate the profit realized by J.W. Electronics on the sale of 1,500 TVs if it keeps its selling price at $300. Show your calculations.arrow_forward
- Carol Cagle has a repetitive manufacturing plant pro-ducing trailer hitches in Arlington, Texas. The plant has an average inventory turnover of only 12 times per year. She has therefore deter-mined that she will reduce her component lot sizes. She has devel-oped the following data for one component, the safety chain clip: Annual demand = 31,200 unitsDaily demand = 120 unitsDaily production (in 8 hours) = 960 unitsDesired lot size (1 hour of production) = 120 unitsHolding cost per unit per year = $12Setup labor cost per hour = $20 How many minutes of setup time should she have her plant man-ager aim for regarding this component?arrow_forwardA company has an annual demand for a product of 2000 units, a carrying cost of $20 per unit per year, and a setup cost of $100. Through a program of setup reduction, the setup cost is reduced to $20. Run costs are $2 per unit. Calculate: The EOQ before setup reduction. The EOQ after setup reduction. The total and unit cost before and after setup reduction.arrow_forwardInventories are bigger with multi-part pricing than with a single price for all units of a good: Group of answer choices False Truearrow_forward
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