In 2008, a company experiences changing levels of demand, but produces a constant numberof units during each quarter. The company allows inventory levels to rise and fall to satisfy thediffering quarterly demand levels for its product.Required:Identify and explain the reasons for three cost changes that would result if the companychanged to a just-in-time production method for 2009. Assume there will be no inventory atthe start and end of the year.(CIMA, 2008)

Transitioning from a traditional production approach to a Just-in-Time (JIT) system can lead to…

Answered: In 2008, a company experiences changing…

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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Ram Roy's firm has developed the following supply, demand, cost, and inventory data Period 1 2 3 Regular Time 30 30 40 Supply Available Overtime Subcontract 5 15 15 15 5 5 Demand Forecast 40 20 units $100 $150 $200 $6 45 55 Initial inventory Regular-time cost per unit Overtime cost per unit Subcontract cost per unit Carrying cost per unit per month Assume that the initial inventory has no holding cost in the first period and backorders are not permitted Allocating production capacity to meet demand at a minimum cost using the transportation method, the total cost is $ (enter your response as a whole number)
As with other products, Fisher-Price faces the decision of how many Weather Teddy units to order for the comingholiday season. Members of the management team suggested order quantities of 15,000, 18,000, 24,000, or28,000 units. The wide range of order quantities suggested indicates considerable disagreement concerning themarket potential. The product management team asks you for an analysis of the stock-out probabilities forvarious order quantities, an estimate of the profit potential, and to help make an order quantity recommendation.Fisher-Price expects to sell Weather Teddy for $24 based on a cost of $16 per unit. If inventory remains afterthe holiday season, Fisher-Price will sell all surplus inventory for $5 per unit. After reviewing the sales historyof similar products, Fisher-Price’s senior sales forecaster predicted an expected demand of 20,000 units with a.95 probability that demand would be between 10,000 units and 30,000 units. Question: One of Fisher-Price’s managers felt…
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.Substitue for Mandatory problem #2 on exam in attachment )-Calculate the Tracking Signal(RSFE/MAD t) given the following data and an alpha=0.4.MAD t-1=15: Period Actual Demand Forecast Demand Error ................... RSFE MAD t TS 0 Start up Start Up Start Up 15 1 30 45 2 43 3 38 4 37 5 40
What is the distinction between simulated and anticipated average demand:
Suppose that we would like to determine Reorder Point for the product. From the historical data the manager determined demand during lead-time for that product fits Normal distribution with a mean of 200 and standard deviation of 10 products. The maximum stock out risk is 10%. Answer the following questions according to the (Q, R) system. a) Find the safety stock if the lead time is 2 weeks. b) Find the reorder point. c) Find the reorder point if the stock out risk decreases to 1%. Comment on the result.
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