OM6 ONLINE-LMS INTEGRATED ACCESS
6th Edition
ISBN: 9781337118323
Author: Collier
Publisher: CENGAGE L
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Question
Chapter 12, Problem 1PA
(a)
Summary Introduction
Interpretation: Total annual logistics cost needs to be calculated based on the given data.
Concept Introduction: Total supply chain cost is a vital measure of performance of any supply chain and it includes all related costs incurred in the supply chain.
(a)
Expert Solution
Explanation of Solution
Given Information:
| Alpha Medical Manufacturing (AMM) outsourcing information for a surgical screw | |||||||
| Contract Manufacturer (Tier 1 supplier) | Price per unit @ Q = 10,000 (C) | Price per unit @ Q = 20,000 (C) | Tariff cost (Ti) per unit | Transport mode cost (Tm) per unit | Order Costs (Co) | Cost to store one unit per year (Ch) | Order Lead Time in Days |
| Xiajing Supplier | $ 1.10 | $0.92 | $0.2 | $0.35 | $ 655 | $ 1.35 | 180 |
| Boston Medical Supplier | $ 1.25 | $1.15 | $0.00 | $0.15 | $ 260 | $ 1.00 | 90 |
| Werkzeug Supplier | $ 1.35 | $1.00 | $0.10 | $0.20 | $ 350 | $ 1.05 | 120 |
Annual Demand (D) = 20,000 units
Working days − 365 days in a year
Total Annual Logistic cost can be calculated using following formula:
Total Annual Logistic Cost (TALC) = Total Procurement cost + Total Tariff cost + Total Transportation cost + Total Order Cycle inventory cost + Total Pipeline inventory cost
Where,
D = Annual Demand
Q = Order Quantity
Co = Ordering Cost
Ch= Inventory holding cost
d = Average Daily demand
L = Lead time
For Order quantity of 10,000 units
| Alpha Medical Manufacturing (AMM) outsourcing information for a surgical screw | |||||||
| Contract Manufacturer (Tier 1 supplier) | Total Procurement Cost | Total Tariff Cost ($) | Total Transport Cost ($) | Order Cycle Inventory Cost ($) | Pipeline Inventory Cost ($) | Total Annual Logistic Cost ($) | |
| Xiajing Supplier | 22,000 | 4,000 | 7,000 | 1,310 | 13,315.06 | 47625.06 | |
| Boston Medical Supplier | 25,000 | 0 | 3,000 | 520 | 4,931.5 | 33451.5 | |
| Werkzeug Supplier | 27,000 | 2,000 | 4,000 | 700 | 69,041.09 | 102741.09 | |
For Order quantity of 20,000 units
| Alpha Medical Manufacturing (AMM) outsourcing information for a surgical screw | |||||||
| Contract Manufacturer (Tier 1 supplier) | Total Procurement Cost | Total Tariff Cost ($) | Total Transport Cost ($) | Order Cycle Inventory Cost ($) | Pipeline Inventory Cost ($) | Total Annual Logistic Cost ($) | |
| Xiajing Supplier | 22,000 | 4,000 | 7,000 | $ 655 | 13,315.06 | 46970.06 | |
| Boston Medical Supplier | 25,000 | 0 | 3,000 | $ 260 | 4,931.5 | 33,191.5 | |
| Werkzeug Supplier | 27,000 | 2,000 | 4,000 | $ 350 | 69,041.09 | 102,391.09 | |
| Alpha Medical Manufacturing (AMM) outsourcing information for a surgical screw | |||||||
| Contract Manufacturer (Tier 1 supplier) | Total Procurement Cost | Total Tariff Cost ($) | Total Transport Cost ($) | Order Cycle Inventory Cost ($) | Pipeline Inventory Cost ($) | Total Annual Logistic Cost ($) | |
| Xiajing Supplier | 22,000 | 4,000 | 7,000 | $ 655 | 13,315.06 | 46970.06 | |
| Boston Medical Supplier | 25,000 | 0 | 3,000 | $ 260 | 4,931.5 | 33,191.5 | |
| Werkzeug Supplier | 27,000 | 2,000 | 4,000 | $ 350 | 69,041.09 | 102,391.09 | |
Total Annual Logistics Cost of each supplier at different order quantity will be
| Total Annual Logistic Cost | Order Quantity (Q) | |
| 10,000 units | 20,000 units | |
| Xiajing Supplier | $ 47,625.06 | $ 46,970.06 |
| Boston Medical Supplier | $ 33,451.5 | $ 33,191.5 |
| Werkzeug Supplier | $ 102,741.09 | $ 102,391.09 |
(b)
Summary Introduction
Interpretation: Recommendation needs to be given based on the given data.
Concept Introduction: Total supply chain cost is a vital measure of performance of any supply chain and it includes all related costs incurred in the supply chain.
(b)
Expert Solution
Explanation of Solution
As per the data calculated in above part,
Boston Medical Supplier should be recommended as it has low total annual logistic cost at both order quantities.
(c)
Summary Introduction
Interpretation: Recommendation needs to be given based on the given data.
Concept Introduction: Total supply chain cost is a vital measure of performance of any supply chain and it includes all related costs incurred in the supply chain.
(c)
Expert Solution
Explanation of Solution
Company should also look for quality parameters that will affect product sales and rate the vendors accordingly before making the final supplier decision.
Company should also consider the management oversight cost and calculate the overall supply chain cost at economic order quantity in order to make a balanced supply chain decision.
Want to see more full solutions like this?
Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
問題2
Production system design involves determining the arrangement of workstations and the...
O allocation of resources to workstations
design of the process
O production schedule
all of the above
Elaborate on the need for and the benefits of an effective supply chain management
(SCM) system in the context of a globalized and networked economy. In your answer,
explain how organizations like Dell and Hewlett-Packard leverage supply chain networks to
maintain competitiveness, and analyse the impact of globalization, technological
advancements, and business environment changes on supply chain structures. Additionally,
evaluate the key components of SCM, including distribution network configuration,
inventory management, and cash-flow management, and discuss how these components
contribute to creating an effective and integrated supply chain. (15)
3.2. Critically evaluate the requirements for effective inventory management within an
organization. In your answer, discuss the importance of inventory accounting systems,
the role of cost information (holding, ordering, and shortage costs), and the significance
of classification systems like ABC analysis. Additionally, analyse how…
Assess the role of EDI in ensuring supply chain security and data integrity. How does EDI
contribute to reducing vulnerabilities in supply chain operations, and what best practices should
organizations adopt to maintain a secure and reliable EDI system? (10)
1.3. Examine how the adoption of modern EDI systems influences the strategic decision-making
process in supply chain management. How does EDI provide supply chain managers with
actionable insights, and what are the implications of these insights for long-term supply chain
planning? (10)
1.4. Evaluate the potential challenges and risks associated with the modernization of EDI systems in
supply chain management. How can organizations effectively manage these challenges to
ensure successful EDI implementation and ongoing optimization? (10)
Chapter 12 Solutions
OM6 ONLINE-LMS INTEGRATED ACCESS
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, operations-management and related others by exploring similar questions and additional content below.Similar questions
- Analyse the impact of integrating EDI (Electronic Data Interchange) with API (Application Programming Interface) on supply chain management, particularly focusing on how this integration enhances information flow and operational efficiency. Consider the challenges that might arise from this integration in terms of managing legacy systems alongside modern applications.arrow_forward1) View the video What is Operations Management (14.01 minutes, Ctrl+Click on the link); what are your key takeaways (tie to one or more of the topics discussed in Chapters 1 and/or 2) after watching this video. (https://www.viddler.com/embed/d01189e1) Note: As a rough guideline, please try to keep the written submission to one or two paragraphs. 2) View the video What McDonald’s is serving up at its new CosMc’s Chain (3.42 mins, Ctrl+Click in the link), and answer the following questions: (https://www.youtube.com/watch?v=k7ojpUzE8q4) i) From a strategic perspective, why do you think McDonald’s is opting for this new chain rather than trying to launch the new menu in its existing restaurants? ii) What factors do you think in McDonald’s external and internal environments are driving its decision to open the CosMc’s locations? iii) How do you think this format will improve McDonald’s profit margin as compared to its regular fast-food restaurants? Note: As a…arrow_forwardSince the end of World War II, globalization has steadily increased with rapid expansion around the turn of the 21st century. What are some of the forces driving globalization and international business? What are some of the challenges of engaging in international business compared to doing business in your home country?arrow_forward
- PS.53 Brother I.D. Ricks is a faculty member at BYU-Idaho whose grandchildren live in Oklahoma and California. He and his wife would like to visit their grandchildren at least once a year in these states. They currently have one vehicle with well over 100,000 miles on it, so they want to buy a newer vehicle with fewer miles and that gets better gas mileage. They are considering two options: (1) a new subcompact car that would cost $18,750 to purchase or (2) a used sedan that would cost $12,750.They anticipate that the new subcompact would get 37 miles per gallon (combined highway and around town driving) while the sedan would get 26 miles per gallon. Based on their road tripping history they expect to drive 13,000 miles per year. For the purposes of their analysis they are assuming that gas will cost $2.93 per gallon.Question: How many miles would the Ricks need to drive before the cost of these two options would be the same? (Display your answer to the nearest whole number.) (Hint:…arrow_forwardChoose one major approach to job design, and then discuss how best that approach can be utilized in either your current or previous employer, including a discussion of its strengths and weaknesses.arrow_forwardThe results of your four plans will provide an indicative EOQ value. State this value and discuss in a precise manner, why it is not the exact, true value. Additional calculations in the form of plans E, F etc. may also assist your explanation of the EOQ and can be includedarrow_forward
- i). Complete the table assuming a Level production plan. ii) Comment on your results and explain whether at this stage, you consider a Level plan is a suitable approach for this particular business. Your comment should include reference to a calculated ‘fill rate’.arrow_forwardIn the following sawtooth inventory profile diagram, two inventory plans with different order quantities (Q) and different frequencies of delivery are shown; order quantity for Plan A = 200 units and Plan B = 50 units. i). Total demand (D) is 350 units, the holding cost per unit (Ch) is equal to (£0.8) and the ordering cost per order (Co) is (£12.5). Calculate the total costs for each plan and state which one is more preferable along with the reason why. ii). There is a stark difference in the composition of the total costs of Plans A and B. Explain this difference and why it occurs. Use the breakdown of costs for each plan to help illustrate your answer.arrow_forwardi). Complete the table for a Chase production plan. ii). Explain whether a Level or Chase plan is more suitable for the demand pattern experienced by this particular business, which incidentally relies on highly skilled workers in the production process. Assume a starting workforce of 7 and that fractional workers are permissible. You should support your answer with numerical data derived from Table 3. In comparing the costs, state any other assumptions made.arrow_forward
- i). Complete for a Chase production plan. ii). Explain whether a Level or Chase plan is more suitable for the demand pattern experienced by this particular business, which incidentally relies on highly skilled workers in the production process. Assume a starting workforce of 7 and that fractional workers are permissible.arrow_forwardComplete the table for a Chase production plan.arrow_forwardHow much can the garden centre expect to sell during each quarter of next year (Year 3) accounting for seasonality? Your forecast must make use of seasonal indices. All workings must be shown in full. (NOTE: Please round your calculations to three decimal places).arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Purchasing and Supply Chain ManagementOperations ManagementISBN:9781285869681Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. PattersonPublisher:Cengage Learning
Contemporary MarketingMarketingISBN:9780357033777Author:Louis E. Boone, David L. KurtzPublisher:Cengage Learning
- MarketingMarketingISBN:9780357033791Author:Pride, William MPublisher:South Western Educational Publishing
Purchasing and Supply Chain Management
Operations Management
ISBN:9781285869681
Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:Cengage Learning
Contemporary Marketing
Marketing
ISBN:9780357033777
Author:Louis E. Boone, David L. Kurtz
Publisher:Cengage Learning
Marketing
Marketing
ISBN:9780357033791
Author:Pride, William M
Publisher:South Western Educational Publishing
Inventory Management | Concepts, Examples and Solved Problems; Author: Dr. Bharatendra Rai;https://www.youtube.com/watch?v=2n9NLZTIlz8;License: Standard YouTube License, CC-BY