Operations Management: Processes and Supply Chains, Student Value Edition Plus MyLab Operations Management with Pearson eText -- Access Card Package (12th Edition)
12th Edition
ISBN: 9780134855424
Author: Lee J. Krajewski, Manoj K. Malhotra, Larry P. Ritzman
Publisher: PEARSON
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Chapter 12, Problem 10P
Summary Introduction
Interpretation: Keeping in mind the costs, how many packages must be shipped to successfully benefit from vertical integration into warehouse operations.
Concept Introduction: The contract with a logistics provider for warehouse and handle packages services requires $9 million under the annual fixed charges. It includes the variable costs of $15 per shipped package. The company found another warehouse that is leased at a cost of $16 million every year. The company found another package delivery services provider who would charge $6 per package delivered.
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Donegal Footwear is an international supplier of outdoor footwear for adventurous families. Currently, the company uses a logistical provider to provide warehouse services and handle packages destined for ground delivery. The contract calls for $9 million in annual fixed charges, which covers the provider’s overhead and warehouse costs, and variable costsof $15 per package shipped. Recently, Donegal Footwear found a warehouse it could lease at a cost of $16 million per year, which includes lease costs, labor, and management oversight. Furthermore, the company found another provider who would deliver packages from the warehouse for $6.00 per package. Considering only costs, how many packages must Donegal Footwear ship to make the vertical integration into warehouse operations beneficial?
Alison's Accessories is a high volume worldwide fashion house with outlets in 65 countries. Sadly, space does not permit an exhaustive list but once the test is over, check out their website. Kalil, the supply chain manager is conducting her usual thorough analysis of her final four candidates for supplier and has developed the following tables of pertinent costs and other shipping metrics. Regardless of supplier, Alison's Accessories will operate 220 days per year and has forecast annual demand of 250,000 units. Kalil has obtained quotes for three different shipment sizes (Freight Costs table). All costs are in US Dollars.
Table 1
Unit costs
Supplier Price/Unit Carrying Cost
A 123 22
B 125 19
C 126 18
D 100 40
Annual Freight Costs
Supplier 15,000 units 25,000 units 50,000 units
A 380,000 260,000 237,000
B 615,000 547,000 470,000
C 285,000 240,000 200,000
D 380,000 260,000 237,000
Other Costs
Supplier Lead Time Annual Admin Costs
A 30 250,000
B 15 275,000
C 7 225,000
D 90…
Please provide answers to subparts d to J:
Company B is a retailer of mobile phones in Australia that works 250 days in a year. The manager is determining a minimum-cost inventory plan for an upcoming phone to be launched in the market. She has collected the following information: • Annual demand: 1000 phones • Phone cost: $1,214 each • Phone RRP: $1,349 each • Net weight: 163 g each • Tare weight: 277 g each • Annual inventory holding cost: 15% • Cost per order to replenish inventory: $75 • Annual in-transit holding cost: 10% • Freight rate: $8.10 per kg • Time to process order for freight: 1 days • Freight transit time: 3 days Solve this problem using a non-linear programming (NLP) model to determine the followings: d. The total cost for holding the inventory e. The total cost for transportation f. The total cost for holding the phones during transit g. The total cost for this inventory plan h. The number of orders i. Ordering point j. The profit from this inventory plan
Chapter 12 Solutions
Operations Management: Processes and Supply Chains, Student Value Edition Plus MyLab Operations Management with Pearson eText -- Access Card Package (12th Edition)
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