
Concept explainers
a
Interpretation:
Amount paid by the hotel for desert and frequency of production of desert under its current policy.
Concept Introduction: Materials Requirement Planning is a process in which planning is made for the requirement of raw material required for manufacturing of the finished product.
a

Explanation of Solution
Demand for desert = 30,000 per year
Production rate = 125 per day
Set up cost = $4
Cost of dessert = $0.40
Daily demand for dessert is calculated by dividing annual demand with the number of days the company can operate in the year.
Hence, the daily demand is 82 desserts.
Calculation of holding cost.
It is given that holding cost is 300% of the cost of the dessert.
Hence, the holding cost per dessert is $1.2
Calculation of total holding and ordering cost for given batch quantity.
It is given that the current batch quantity is 300 desserts.
Calculation of annual holding cost:
Annual holding cost is calculated by multiplying the holding cost with two values. First value is calculated by dividing the quantity with 2. Second value is calculated by subtracting the value attained by dividing the daily demand with the production from 1.
Hence, the annual holding cost is $61.92
Calculation of annual ordering cost:
It is calculated by multiplying the setup cost with the value attained by dividing the annual demand with the batch quantity.
Hence, the annual ordering cost is $400.
Calculation of total cost of inventory:
It is calculated by adding the annual holding cost and annual ordering cost.
Hence, the total cost of inventory is $461.9
Calculation of frequency of dessert production:
It is calculated by dividing the annual demand with the batch quantity.
Hence, the company will produce 100 batches.
b
Interpretation:
Order size required to minimize the total annual cost and amount of savings by using order size.
Concept Introduction: Materials Requirement Planning is a process in which planning is made for the requirement of raw material required for manufacturing of the finished product.
b

Explanation of Solution
Calculation of order size:
It is calculated by dividing two values and taking the square root of the attained value. First value is the multiple of annual demand and set up cost with 2. Second value is calculated by multiplying the holding cost with the value attained by subtracting the dividing value of daily demand with production rate from 1.
Hence, the economic order quantity is 762.5
Calculation of total holding cost and ordering cost for optimal order quantity:
It is given that the optimal order quantity is 762.5 desserts.
Annual holding cost is calculated by multiplying the holding cost with two values. First value is calculated by dividing the quantity with 2. Second value is calculated by subtracting the value attained by dividing the daily demand with the production from 1.
Hence, the annual holding cost is $157.38
Calculation of annual ordering cost:
It is calculated by multiplying the setup cost with the value attained by dividing the annual demand with the batch quantity.
Hence, the annual ordering cost is $157.37
Calculation of total cost of inventory:
It is calculated by adding annual holding cost and annual ordering cost.
Annual saving in the total cost of optimal order quantity:
It is calculated by subtracting the total cost of optimal quantity from the total cost of given batch quantity.
Hence, the annual saving is $147.2
c
Interpretation:
Change in size of refrigerated pantry.
Concept Introduction: The efficiency of output is the actual productivity generated compared with the planned or effective capacity. It is usually calculated by dividing actual output by effective capacity.
c

Explanation of Solution
The plan to expand the capacity
The lowest inventory cost order size is 762 desserts. However, the refrigerator can only store 300 desserts. Thus, the capacity must increase 462 spaces.
Want to see more full solutions like this?
Chapter 10 Solutions
Practical Operations Management
- Women who ask for what they want in negotiation are less well-liked than women who do not self-advocate. However, nonassertive, other-advocating women suffer a leadership backlash and are regarded as less competent because their behavior is regarded to be _____ and _____. A. high-negative feminine; low-positive masculine B. high-positive feminine; high-positive masculine C. high-negative masculine; low-negative feminine D. low-positive masculine; low-positive femininearrow_forwardThere are five most recognized personality traits that can reliably be measured and predict negotiator behavior in a number of different situations. All of the following are one of those "Big 5" personality traits except _____. A. conscientiousness B. introversion C. agreeableness D. openness to experiencearrow_forwardWith regard to reputation in negotiation, negotiators who use adversarial, stubborn, and ethically questionable behavior often have the effect of _____. A. improving their business relationships B. decreasing their effectiveness as a negotiator C. improving their business relationships D. decreasing their group statusarrow_forward
- When it comes to assertiveness, there is only a modest link between negotiators' self-views and how the counterparty sees them. Many negotiators come away from a negotiation thinking they came on too strong with the counterparty. The _____ refers to the fact that negotiators believe they are coming on too strong with the counterparty, but they actually are not. A. Collective trap illusion B. Attribution error C. Aggressive anchoring bias D. Line-crossing illusionarrow_forwardAs you think about the issue of using chatbots in contract negotiations, consider whether other facets and concepts of negotiations that we have discussed and whether they would be adequately addressed.arrow_forwardWhile I am not a fan of AI as of yet, I do understand the endless possibilities. Based on the research, it is clear that AI has great potential for negotiation (Yang, 2025). Herold et al. (2025) suggested that AI can flag potential risks and liabilities, allowing negotiators to address them and mitigate potential problems proactively. AI can draft new contract templates by examining industry standards and past contracts, and AI technology can help lawyers spot errors and inconsistencies in contract drafts. In relation to risk management, AI can flag possible risks and liabilities, allowing negotiators to proactively address them and lessen potential problems, which can speed up the negotiation process, making the negotiation efficient because AI can industrialize tasks like document review, redlining, and finding potential issues, significantly reducing negotiation time. Lastly, AI can analyze vast amounts of data and identify errors, inconsistencies, and irregularities in…arrow_forward
- What is a main thought on using AI in contract negotiations?arrow_forwardWhat are some people thoughts on using AI in contract negotiations?arrow_forward3. Develop a high-level or summary: a. Risk Management Plan Focus on specific, actionable steps for each risk and mitigation strategy.Provide detailed timelines for procurement, stakeholder engagement, and risk monitoring.Avoid over-simplifying and add more technical details in areas like quality assurance and financial control measures. Add a risk prioritization method and mention how risks will be monitored and reviewed throughout the project lifecycle. Overall, it is well organized andc overs key risks.arrow_forward
- 3. Develop a high-level or summary: Human Resource Management Plan Provide more concrete timelines and actionable steps for human resource management.Include more detailed risk management strategies and link them more explicitly to the overall project plan.Expand on how training and development will be evaluated and tracked.Also, the overall length is good, but some sections could be condensed by eliminating repetition (e.g., you discuss stakeholder communication and engagement in two sections without adding new information).Try not to repeat the same risk management ideas (e.g., resource sharing and stakeholder concerns) in multiple sections without adding value.arrow_forwardBased on the U.S. Department of Transporation's publication on the number of inrternatioal passengers that come through New York airport (JFK) in 2012, how would I estimate the passenger volume for the coming year?arrow_forwardWhat are the role of trends and seasonality based on the Department of Transportation publication of the number of international passengers that come through New York (JFK) in 2012?arrow_forward
- Practical Management ScienceOperations ManagementISBN:9781337406659Author:WINSTON, Wayne L.Publisher:Cengage,Purchasing and Supply Chain ManagementOperations ManagementISBN:9781285869681Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. PattersonPublisher:Cengage LearningMarketingMarketingISBN:9780357033791Author:Pride, William MPublisher:South Western Educational Publishing

