Principles of Operations Management: Sustainability and Supply Chain Management (10th Edition)
Principles of Operations Management: Sustainability and Supply Chain Management (10th Edition)
10th Edition
ISBN: 9780134181981
Author: Jay Heizer, Barry Render, Chuck Munson
Publisher: PEARSON
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Chapter 12, Problem 1.1CS
Summary Introduction

Introduction:

ZBC is a wholesale distributor of bicycles and bicycle parts situated at place S. The retail outlets of the company are within 400 mile radius to the distribution centers. The distribution center passes order to its retail outlets within 2 days after the order is placed by the retail outlets provided the stocks are available.

When there are no stocks, no backorder is taken and the outlets have to arrange the products from some other distributors and the company loses its order. The company distributes wide range of bicycles and air wing is the popular brand which is the major source of revenue.

The company receives all of its order from single manufacturer and shipment takes 4 weeks from the time of order. ZBC estimates the cost for ordering is $65. The purchase price is 60% of the retail price and carrying cost is 1% per month of the purchase price. The retail price of air wing is $170.

Month 2011 2012 Forecast for 2013
Jan 6 7 8
Feb 12 14 15
Mar 24 27 31
Apr 46 53 59
May 75 86 97
Jun 47 54 60
Jul 30 34 39
Aug 18 21 24
Sep 13 15 16
Oct 12 13 15
Nov 22 25 28
Dec 38 42 47
Total 343 391 439

The demand for the past two year is shown in the table and the company wants to make inventory plan for 2016. The company wants to maintain 95% service level to minimize the loss.

To develop: Inventory plan for company ZBC.

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Zhou Bicycle Company (ZBC), located in Seattle, is a wholesale distributor of bicycles and bicycle parts. Formed in 1981  by University of Washington Professor Yong-Pin Zhou, the  firm’s primary retail outlets are located within a 400-mile radius  of the distribution center. These retail outlets receive the order  from ZBC within 2 days after notifying the distribution center,  provided that the stock is available. However, if an order is not  fulfilled by the company, no backorder is placed; the retailers  arrange to get their shipment from other distributors, and ZBC  loses that amount of business.  The company distributes a wide variety of bicycles. The  most popular model, and the major source of revenue to the  company, is the AirWing. ZBC receives all the models from a  single manufacturer in China, and shipment takes as long as 4  weeks from the time an order is placed. With the cost of communication, paperwork, and customs clearance included, ZBC  estimates that each time an…
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Zhou Bicycle Company Zhou Bicycle Company (ZBC), located in Seattle, is a whole- sale distributor of bicycles and bicycle parts. Formed in 1981 by University of Washington Professor Yong-Pin Zhou, the firm's primary retail outlets are located within a 400-mile radius of the distribution center. These retail outlets receive the order The company distributes a wide variety of bicycles. The most popular model, and the major source of revenue to the company, is the Air Wing. ZBC receives all the models from a single manufacturer in China, and shipment takes as long as 4 weeks from the time an order is placed. With the cost of com- munication, paperwork, and customs clearance included, ZBC estimates that each time an order is placed, it incurs a cost of $65. The purchase price paid by ZBC, per bicycle, is roughly 60% of the suggested retail price for all the styles available, and the inventory carrying cost is 1% per month ( 12% per year) of the purchase price paid by ZBC. The retail price…

Chapter 12 Solutions

Principles of Operations Management: Sustainability and Supply Chain Management (10th Edition)

Ch. 12 - Prob. 10DQCh. 12 - Prob. 11DQCh. 12 - Explain the following: All things being equal, the...Ch. 12 - Prob. 13DQCh. 12 - Prob. 14DQCh. 12 - Prob. 15DQCh. 12 - When demand is not constant, the reorder point is...Ch. 12 - Prob. 17DQCh. 12 - State a major advantage, and a major disadvantage,...Ch. 12 - L. Houts Plastics it a large manufacturer of...Ch. 12 - Prob. 2PCh. 12 - Jean-Mane Bourjollys restaurant has the following...Ch. 12 - Lindsay Electronics, a small manufacturer of...Ch. 12 - William Sevilles computer training school, in...Ch. 12 - Prob. 8PCh. 12 - Prob. 9PCh. 12 - Matthew Liotines Dream Store sells beds and...Ch. 12 - Southeastern Bell stocks a certain switch...Ch. 12 - Lead time for one of your fastest-moving products...Ch. 12 - Annual demand for the notebook binders at Duncans...Ch. 12 - Thomas Kratzer is the purchasing manager for the...Ch. 12 - Joe Henrys machine shop uses 2,500 brackets during...Ch. 12 - Prob. 16PCh. 12 - Prob. 17PCh. 12 - Prob. 18PCh. 12 - Prob. 19PCh. 12 - Prob. 20PCh. 12 - Cesar Rego Computers, a Mississippi chain of...Ch. 12 - Prob. 22PCh. 12 - Prob. 23PCh. 12 - Prob. 24PCh. 12 - Prob. 25PCh. 12 - M. P. VanOyen Manufacturing has gone out on bid...Ch. 12 - Chris Sandvig Irrigation, Inc., has summarized the...Ch. 12 - Prob. 28PCh. 12 - Prob. 29PCh. 12 - Prob. 30PCh. 12 - Barbara Flynn is in charge of maintaining hospital...Ch. 12 - Prob. 42PCh. 12 - Authentic Thai rattan chairs (shown in the photo)...Ch. 12 - Prob. 44PCh. 12 - Prob. 45PCh. 12 - Prob. 46PCh. 12 - Prob. 47PCh. 12 - Gainesville Cigar stocks Cuban agars that have...Ch. 12 - A gourmet coffee shop in downtown San Francisco is...Ch. 12 - Prob. 51PCh. 12 - Henrique Correas bakery prepares all its cakes...Ch. 12 - Prob. 53PCh. 12 - Prob. 1.1CSCh. 12 - Prob. 1.2CSCh. 12 - Prob. 1.3CSCh. 12 - Prob. 2.1CSCh. 12 - Prob. 2.2CSCh. 12 - Prob. 2.3CSCh. 12 - Managing Inventory at Frito-Lay Frito-Lay hat...Ch. 12 - Prob. 1.2VCCh. 12 - Prob. 1.3VCCh. 12 - Prob. 1.4VCCh. 12 - Prob. 1.5VCCh. 12 - Prob. 1.6VCCh. 12 - Managing Inventory at Frito-Lay Frito-Lay hat...Ch. 12 - Inventory Control at Wheeled Coach Controlling...Ch. 12 - Prob. 2.2VCCh. 12 - Inventory Control at Wheeled Coach Controlling...
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