Concept explainers
Videos
a)
To determine: The per unit holding cost of a laptop with Country U production.
a)
Explanation of Solution
Given information:
Safety factory (SF) = 2.25
Holding cost per laptop per week in Country U (H) = $4
Holding cost per laptop per week in Country T (H) = $3.50
Lead time in Country U (L) = 1 week
Lead time in Country T (L) = 8 weeks
Shipping cost (C) = $2
Weekly demand (D) = 1,000 laptops
Standard deviation (S) = 800
Calculation of on-order inventory:
Calculation of on-hand inventory:
Calculation of total average inventory:
Calculation of average weekly holding cost:
Calculation of average holding cost per unit:
The per unit holding cost of a laptop with Country U production is $14.184.
b)
To determine: The per unit holding cost of a laptop with Country T production.
b)
Explanation of Solution
Given information:
Safety factory (SF) = 2.25
Holding cost per laptop per week in Country U (H) = $4
Holding cost per laptop per week in Country T (H) = $3.50
Lead time in Country U (L) = 1 week
Lead time in Country T (L) = 8 weeks
Shipping cost (C) = $2
Weekly demand (D) = 1,000 laptops
Standard deviation (S) = 800
Calculation of on-order inventory:
Calculation of on-hand inventory:
Calculation of total average inventory:
Calculation of average weekly holding cost:
Calculation of average holding cost per unit:
The per unit holding cost of a laptop with Country T production is $46.90.
c)
To determine: The change in cost per laptop if the production switched to Country T.
c)
Explanation of Solution
Given information:
Safety factory (SF) = 2.25
Holding cost per laptop per week in Country U (H) = $4
Holding cost per laptop per week in Country T (H) = $3.50
Lead time in Country U (L) = 1 week
Lead time in Country T (L) = 8 weeks
Shipping cost (C) = $2
Weekly demand (D) = 1,000 laptops
Standard deviation (S) = 800
Assembly time (T) = 40 minutes
Cost of labor in Country U (W) = $40 per hour
Cost of labor in Country T (W) = $10 per hour
When production is in Country U:
Calculation of labor cost per unit:
There is no transportation cost. The average holding cost per unit is $14.184.
Calculation of total cost:
When production is in Country T:
Calculation of labor cost per unit:
The shipping cost is $2. The average holding cost per unit is $46.90
Calculation of total cost:
Cost difference when the production moves from Country U to Country T:
The cost increases by $14.72.
Want to see more full solutions like this?
Chapter 11 Solutions
OPERATION MANAGEMENT
- Question 1M&H company ltd. sells television sets and has collected monthly sales data (in units) for the past 12months as shown in table 1below: TABLE 1 Month Sales (Units)1 1202 1353 1504 1655 1806 2007 1958 2109 225 10 24011 25512 270 Using the data provided, answer the following questions: a. Using a 3-month weighted moving average with weights 0.5, 0.3, and 0.2 (most recent monthhaving the highest weight), calculate the forecast for month 13. b. If the company applies an exponential smoothing method with a smoothing constant (α) = 0.2,and assumes an initial forecast of 120 units for Month 1, calculate the forecast for month 13.c. Calculate the Mean Absolute Deviation (MAD) for the exponential smoothing method andweighted moving average method using the actual sales data for Months 4 to 12 and determinewhich method is more accurate. d. Compute the values of a (intercept) and b (slope) using the least squares method.e. Use the trend equation to forecast the demand for…arrow_forwardYou may need to use the appropriate technology to answer this question. An event hall that hosts public lectures, book readings, poetry slams, and other similar events uses a one-week periodic review inventory system for the throat lozenges that it stocks for its patrons. A two-day lead time is needed for any order, and the event hall is willing to tolerate an average of one stock-out per year. (a) Using the event hall's service guideline, what is the probability of a stock-out associated with each replenishment decision? (Round your answer to four decimal places.) (b) What is the replenishment level if demand during the review period plus lead-time period is normally distributed with a mean of 50 units and a standard deviation of 12 units? (Round your answer to the nearest integer.) (c) What is the replenishment level if demand during the review period plus lead-time period is uniformly distributed between 45 and 95 units? (Round your answer to the nearest integer.)arrow_forwardprovide scholarly research on the importance of internal risk assessement and auditng process in relation to US bank Cititbank loosing USD500 million in August 2020arrow_forward
- The annual requirements for a particular raw material are 2,000 units costing Re. 1 each to the manufacturer. The ordering cost is Rs. 10 per order and the carrying cost 16% per annum of the average inventory value. Find and explain the economic order quantity and the total inventory cost per annum.arrow_forwardFollowing their early success and growth, Listo hired a number of new managers and employees. In response to the expansion of staff, Listo reorganized by adding layers of supervisors and managers between executive management and line staff; however, growth occurred so rapidly that proper training was not provided to the new employees. Management was less concerned with the employees’ opinions and was more focused on production and profit. Instead of enlisting employees’ opinions, more directive orders were given. The change and increased complexity associated with adding new layers to the hierarchy resulted in the organization’s goals and objectives becoming unclear. Employees began to complain about the new bureaucratic processes and the slow pace of decision-making. While the organization has been growing in size, productivity has slowed and quality has decreased. The turnover rate is higher than it has ever been, and the number of sick days that people take has doubled over the past…arrow_forwardFollowing their early success and growth, Listo hired a number of new managers and employees. In response to the expansion of staff, Listo reorganized by adding layers of supervisors and managers between executive management and line staff; however, growth occurred so rapidly that proper training was not provided to the new employees. Management was less concerned with the employees’ opinions and was more focused on production and profit. Instead of enlisting employees’ opinions, more directive orders were given. The change and increased complexity associated with adding new layers to the hierarchy resulted in the organization’s goals and objectives becoming unclear. Employees began to complain about the new bureaucratic processes and the slow pace of decision-making. While the organization has been growing in size, productivity has slowed and quality has decreased. The turnover rate is higher than it has ever been, and the number of sick days that people take has doubled over the past…arrow_forward
- Discuss in detail any five types of authority. give citations and referencearrow_forwardCan you guys help me with this? Thank you! Business Environment: Provide insights into the guidelines for conducting business in the chosen country and working there as an expatriate. This information is vital for understanding the practicalities of engagement in that particular environment. The country in here is India Put the answer as bullet points, provide sources that have relevant information for the answer on economic factorsarrow_forwardCan you guys help me with this? Thank you! Intriguing Facts: Incorporate engaging facts about the country that enhance its value and uniqueness within the global supply chain landscape. These can include cultural anecdotes, technological innovations, or historical achievements. The country in here is India Put the answer as bullet points, provide sources that have relevant information for the answer on economic factorsarrow_forward
- Can you guys help me with this? Thank you! Economic Factors: Evaluate the country's economic performance by analyzing key indicators such as GDP (Gross Domestic Product), GDP per capita, exports, and imports. These metrics provide insight into the country's economic prowess and its position in global trade. The country in here is India Put the answer as bullet points, provide sources that have relevant information for the answer on economic factorsarrow_forwardprovide scholarly reseach and define legal and complince risk and reputational risk in banking. Additionally 1. What more can be done about it 2. the department where the risk is exposed to 3. what strategy can be used 4. responsible personarrow_forwardRead the case in the link below and Develop a risk management programme appropriate for this case using the attached template. https://finopsinfo.com/investors/citis-900m-blunder-casts-light-on-poor-loan-ops/arrow_forward
Purchasing and Supply Chain ManagementOperations ManagementISBN:9781285869681Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. PattersonPublisher:Cengage Learning
MarketingMarketingISBN:9780357033791Author:Pride, William MPublisher:South Western Educational Publishing
Practical Management ScienceOperations ManagementISBN:9781337406659Author:WINSTON, Wayne L.Publisher:Cengage,