EBK OM
6th Edition
ISBN: 9781305888210
Author: Collier
Publisher: YUZU
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Question
Chapter 12, Problem 3CSQD
Summary Introduction
Interpretation:
Total cash to cash conversion cycle.
Concept Introduction:
The cash-to-cash conversion cycle is one of the most crucial financial metrics for supply chain performance. It is defined as the cash flows from the time costs are incurred (such as purchasing the raw material inventory) to when it is paid (i.e. the accounts receivable).
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Where possible, the inventory costing method shouldmimic actual product flows.” Do you agree? Explain.
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
Explain the advantages of just -in-time purchasing (JITP)?
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