One of the biggest problems for WC Company was controlling the inventory. The mass customization and responsiveness made the firm realize that the success of the firm is dependent on the inventory control. The firm is a competitive giant where its competitors do not have the purchasing power as that of WC Company. But the cost advantage cannot be taken lightly. The bill of materials must be precise if the products are to be delivered on time. To determine: The additional policies and techniques that can be initiated to maintain accurate inventory records. Introduction: They are classified as A-class with 15% of items, B-class with 30% of the items, and C-class with 55% of the items. ABC classification system: It is an inventory method for classifying the items under three different categories as follows: A: most valuable items that account to 70-80 percent of the annual consumption value. A-items typically account for 10-20 percent of the total inventory. B: intermediate items that account to 15-25 percent of the annual consumption value. B-items typically account for 50 percent of the total inventory. C: least valuable items that account to 5 percent of the annual consumption value. C-items account for 30 percent of the total inventory. The classification is done for the firm to concentrate more on the critical few items rather than the trivial many items.

Question

Want to see the full answer?

Answer 1

Question

Chapter 12, Problem 2.2VC

Summary Introduction

Case summary:

One of the biggest problems for WC Company was controlling the inventory. The mass customization and responsiveness made the firm realize that the success of the firm is dependent on the inventory control.

The firm is a competitive giant where its competitors do not have the purchasing power as that of WC Company. But the cost advantage cannot be taken lightly. The bill of materials must be precise if the products are to be delivered on time.

To determine: The additional policies and techniques that can be initiated to maintain accurate inventory records.

Introduction: They are classified as A-class with 15% of items, B-class with 30% of the items, and C-class with 55% of the items.

ABC classification system:

It is an inventory method for classifying the items under three different categories as follows:

A: most valuable items that account to 70-80 percent of the annual consumption value. A-items typically account for 10-20 percent of the total inventory.

B: intermediate items that account to 15-25 percent of the annual consumption value. B-items typically account for 50 percent of the total inventory.

C: least valuable items that account to 5 percent of the annual consumption value. C-items account for 30 percent of the total inventory.

The classification is done for the firm to concentrate more on the critical few items rather than the trivial many items.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

In the following problems assume, unless otherwise stated, that S = $40, σ = 30%, r =8%,and δ =0. 13.1 Suppose you sell a 45-strike call with 91 days to expiration. What is delta? If the option is on 100 shares, what investment is required for a delta-hedged portfolio? What is your overnight profit if the stock tomorrow is $39? What if the stock price is $40.50?

Question 1 M&H company ltd. sells television sets and has collected monthly sales data (in units) for the past 12 months as shown in table 1below: TABLE 1 Month Sales (Units) 1 120 2 135 3 150 4 165 5 180 6 200 7 195 8 210 9 225 10 240 11 255 12 270 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 month having the highest weight), calculate the forecast for month 13. [2 marks] b. If the company applies an exponential smoothing method with a smoothing constant (a) = 02, and assumes an initial forecast of 120 units for Month 1, calculate the forecast for month 13. [6 marks] c. Calculate the Mean Absolute Deviation (MAD) for the exponential smoothing method and weighted moving average method using the actual sales data for Months 4 to 12 and determine which method is more accurate. [8 marks] d. Compute the values of a (intercept) and b (slope) using the least squares method. [7 marks] e. Use the…

Question 4 MGM12026 Production and Operations Management semester il 2024 A company operates a manufacturing plant that produces two products, A and B. The plant has the following capacity data: . . Design Capacity: 15,000 machine hours per month Effective Capacity: 12,000 machine hours per month Actual Output (Utilized Capacity): 10,000 machine hours per month Additionally, the plant produces Product A and Product B, with the following production data: Product Demand (Units) Processing Time Contribution Margin ($ (hours per unit) per unit) A 3,000 2.5 40 B 4,000 1.5 30 a. Calculate the plant's i. Capacity Utilization [3 marks] ii. Effective Capacity Utilization [3 marks] iii. Efficiency. Interpret the results. [3 marks] b. Compute the total machine hours required to meet full demand for both products. [5 marks] c. Determine whether the plant has sufficient capacity to meet full demand. If not, calculate the shortfall in machine hours. [3 marks] d. Using the contribution margin per…