Answered: First, customer lead times for finished…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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Read the paragraph and answer the question. New Challenges for Material Department: Max Brisco indicated that he expected the materials group to play a major role in support of the new corporate strategy and needed to know by next week the specifics of Rick’s plan. The task force had set a number of ambitious targets. First, customer lead times for finished products were to be reduced to six weeks from the current average of 14 weeks. Second, the new objective for inventory turns was 20 times. Meanwhile, raw material stock-outs were to be eliminated. Third, Max believed that product standardization also would provide opportunities to reduce costs for purchased goods. He expected that costs for raw materials and components could be cut by 10 percent over the next 12 months. Rick fully supported the new direction that the company was taking and saw this as an opportunity to make major changes. He knew that Max would want the specifics of his plan during the meeting in a week’s time. 1. Develop your plan considering different challenges highlighted for the material department.

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