EBK OPERATIONS MANAGEMENT
13th Edition
ISBN: 8220103675987
Author: Stevenson
Publisher: YUZU
expand_more
expand_more
format_list_bulleted
Concept explainers
Textbook Question
Chapter 13, Problem 13DRQ
The purchasing agent for a company that assembles and sells air-conditioning equipment in a Latin American country noted that the cost of compressors has increased significantly each time they have been reordered. The company uses an EOQ model to determine order size. What are the implications of this price escalation with respect to order size? What factors other than price must be taken into consideration?
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
What is the relationship between purchasing and the classical EOQ model?
The purchasing agent for a company that assembles and sells air-conditioning equipment in a Latin American country noted that the cost of compressors has increased significantly each time they have been reordered. The company uses an EOQ model to determine order size. What are the implications of this price escalation with respect to order size? What factors other than price must be taken into consideration?
The purchasing agent for a company that assembles and sells air-conditioning eqpt in US has noted that the cost of compressors has increased significantly each time they have reordered. The company uses EOQ model to determine order size. What are the implications of this price escalation with respect to order size? What factors other than price must be taken into consideration?
Chapter 13 Solutions
EBK OPERATIONS MANAGEMENT
Ch. 13 - What are the primary reasons for holding...Ch. 13 - What are the requirements for effective inventory...Ch. 13 - Briefly describe each of the costs associated with...Ch. 13 - What potential benefits and risks do RFID tags...Ch. 13 - Prob. 5DRQCh. 13 - Prob. 6DRQCh. 13 - a. List the major assumptions of the EOQ model. b....Ch. 13 - Explain briefly how a higher carrying cost can...Ch. 13 - What is safety stock, and what is its purpose?Ch. 13 - Prob. 10DRQ
Ch. 13 - What is meant by the term service level? Generally...Ch. 13 - Describe briefly the A-B-C approach to inventory...Ch. 13 - The purchasing agent for a company that assembles...Ch. 13 - Explain how a decrease in setup time can lead to a...Ch. 13 - What is the single-period model, and under what...Ch. 13 - Can the optimal stocking level in the...Ch. 13 - Prob. 17DRQCh. 13 - What trade-offs are involved in each of these...Ch. 13 - Who needs to be involved in inventory decisions...Ch. 13 - How has technology aided inventory management? How...Ch. 13 - To be competitive, many fast-food chains began to...Ch. 13 - As a supermarket manager, how would you go about...Ch. 13 - Sam is at the post office to mail a package. After...Ch. 13 - Give two examples of unethical conduct involving...Ch. 13 - Prob. 1PCh. 13 - a. The following table contains figures on the...Ch. 13 - A bakery buys flours in 25-pound bags. The bakery...Ch. 13 - A large law firm uses an average of 40 boxes of...Ch. 13 - Garden Variety Flower Shop uses 750 clay pots a...Ch. 13 - A produce distributor uses 800 packing crates a...Ch. 13 - A manager receives a forecast for next year....Ch. 13 - A food processor uses approximately 27,000 glass...Ch. 13 - The Friendly Sausage Factory (FSF) can produce hot...Ch. 13 - A chemical firm produces sodium bisulfate in...Ch. 13 - A company is about to begin production of a new...Ch. 13 - Prob. 12PCh. 13 - A mail-order house uses 18,000 boxes a year....Ch. 13 - A jewelry firm buys semiprecious stones to make...Ch. 13 - A manufacturer of exercise equipment purchases the...Ch. 13 - A company will begin stocking remote control...Ch. 13 - A manager just received a new price list from a...Ch. 13 - A newspaper publisher uses roughly 800 feet of...Ch. 13 - Given this information: Expected demand during...Ch. 13 - Given this information: Lead-time demand = 600...Ch. 13 - Demand for walnut fudge ice cream at the Sweet...Ch. 13 - The injection molding department of a company uses...Ch. 13 - A company uses 85 circuit boards a day in a...Ch. 13 - One item a computer store sells is supplied by a...Ch. 13 - The manager of a car wash received a revised price...Ch. 13 - A small copy center uses five 500-sheet boxes of...Ch. 13 - Ned's Natural Foods sells unshelled peanuts by the...Ch. 13 - Regional Supermarket is open 360 days per year....Ch. 13 - A service station uses 1,200 cases of oil a year....Ch. 13 - Caring Hospital's dispensary reorders doses of a...Ch. 13 - A drugstore uses fixed-order cycles for many of...Ch. 13 - Prob. 32PCh. 13 - Prob. 33PCh. 13 - Demand for jelly doughnuts on Saturdays at Don's...Ch. 13 - A public utility intends to buy a turbine as part...Ch. 13 - Skinner's Fish Market buys fresh Boston bluefish...Ch. 13 - A small grocery store sells fresh produce, which...Ch. 13 - Demand for devil's food whipped-cream layer cake...Ch. 13 - Prob. 39PCh. 13 - Demand for rug-cleaning machines at Clyde's...Ch. 13 - A manager is going to purchase new processing...Ch. 13 - A Las Vegas supermarket bakery must decide how...Ch. 13 - Offwego Airlines has a daily flight from Chicago...Ch. 13 - UPD Manufacturing produces a range of health care...Ch. 13 - Prob. 1.2CQCh. 13 - Prob. 2.1CQCh. 13 - Grill Rite is an old-line company that started out...Ch. 13 - SARAH LUBBERS AND CHRIS RUSCHE, GRAND VALLEY STATE...Ch. 13 - SARAH LUBBERS AND CHRIS RUSCHE, GRAND VALLEY STATE...Ch. 13 - Prob. 4.3CQCh. 13 - SARAH LUBBERS AND CHRIS RUSCHE, GRAND VALLEY STATE...Ch. 13 - Prob. 4.5CQCh. 13 - Prob. 1OTQCh. 13 - Prob. 2OTQCh. 13 - Prob. 3OTQCh. 13 - Prob. 4OTQ
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
- The chapter presented various approaches for the control of inventory investment. Discuss three additional approaches not included that might involve supply chain managers.arrow_forwardis the percentage of the billed cost given by a vendor when a stipulated quantity is purchased. 1. Quantity Discount 2. Cash Discount 3. Vendor discount 4. List price discountarrow_forwardYour widget factory requires GWium for polishing. GWium is expensive but worth it and a little goes a long way. Each widget requires 0.1 ounces of GWium to produce. Your supply contract enables you to buy 10,000 ounces of GWium per day for $30/ounce. This is a good deal; the market price is $40/ounce. Total cost of other materials and labor (excluding GWium) is $2.25/widget. You sell to a wholesaler, who buys all widgets you produce at a non-negotiable price of $6.25/widget. Which of the following are true. A. Selling the widgets is a much better course of action than selling the GWium B. Selling the GWium on the open market is a much better course of action than making the widgets O C. You could produce 100,000 widgets per day D. Both A and B E. Both B and Carrow_forward
- Please do not give solution in image format thankuarrow_forwardIn the retail coffee industry, with many mom-and-pop coffee stores and retail coffee shows, the number of competitors in the industry is high. In such a case, most coffee houses use beans and other ingredients to create different blends of coffee. Many suppliers provide the beans required by these firms. Moreover, there is not a significant difference in the quality of the product from different suppliers. In addition, with many suppliers offering similar commodity-type products, the switching costs for the focal firms would below. Referring to the second part of the above scenario, all of the mentioned factors combined will result in ____________. * high threat of new entrants to the industry high bargaining power of the suppliers low threat of new entrants to the industry low bargaining power of the suppliersarrow_forwardExplain the one-time purchasing decision and the single-period inventory modelarrow_forward
- Determine the order quantity, reorder point, annual holding cost, and order cost, then assume a price break of $50 per order was offered for purchase quantities of 2,000 or more units per order. If you took advantage of this price break, how much would you save annually? When calculating the z-score, use the NORM.S.INV() function from excel.arrow_forwardAlina Limited is a manufacturer of widgets orders components for use in manufacturing. The estimated demand for the components during the coming year is 15,000. Order costs are $100 per order; carrying costs are $12 per component. Using the economic order quantity model What is Alina Ltd’s optimum order quantity? If the supplier guarantees a three (3) day delivery on any order that is placed, What is the re-order point?arrow_forwardThe management of two different-sized sachets of maize meal—5 kg and 3 kg—is entrusted to you. The larger sachet is priced at R45 and the smaller one is R30, according to Shoprite your primary supplier. Currently, the promotion for the smaller packet says, "Buy ONE get the second HALF PRICE!" Propose which size of Sugar currently gives you the best value for money.what is the annual demand of Maize Meal = 750 units (bigger size), Delivered purchase cost = R35/units, Annual carrying cost percentage= 25 percent, Order cost = R50/order. The lead time is 10 working days. Assuming 20 working days per month. Determine the Economic Order QuantityDetermine the reorder pointDetermine the average inventorySuppose orders are placed only at review time. what is the optimal period and the optimal order quantity.arrow_forward
- I am planning a Holiday Ornament to commemorate the christmas spirit. Forcasted demand for ornaments is normally distributed with a mean of 40,000 with a standard deviation of 15,000 units. The cost per ornament is $3 and are sold to people around the world for $10 each. All unsold ornaments are donated after the holidays without any text deductions for me. How many ornaments should I tell my supplier to produce? What's my expected profit? If the manufacturer were to discount the price to me to $2.75 if I ordered at least 80,000 units should I do it? Justify the answer with profit estimates. please use excelarrow_forwardMAY I ASK FOR THE SOLUTIONS AND ANSWERS OF NOS. 12 to 17 (kindly refer to the table) Thank you! ABC Corporation resells one type of candle. It has 250 working days. Each day, it sells an average of 500 boxes but may sometimes sell a maximum of 600 boxes. The supplier takes an average of 5 days to deliver the order. During busier times, the supplier may take 7 days. Based on ABC’s records, ordering cost average P400 per order. Storage cost per box average P5 per year. There is also an opportunity cost of 1% per year for every peso invested in inventories. Each box of candles costs P450. If ABC would continue its current inventory management policy, it would keep 10,000 boxes as safety stock and order tendays-worth of inventory. (A) Reorder Point 1. What should be the reorder point in boxes? 2. How much would the normal lead time usage be? 3. How much should ABC keep as safety stock? (B) Economic Order Quantity 4. What is the annual demand for the boxes of candles? 5. How much is the…arrow_forwardPerform an ABC analysis on the following set of products. Item Annual Demand Unit Cost A211 800 $9 B390 100 $90 C003 450 $6 D100 400 $100 E707 85 $2,000 F660 250 $320 G473 500 $75 H921 100 $75 Answer: Item Annual Demand Unit Cost Volume Cumulative volume Cumulative percent Total =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
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
Inventory Management | Concepts, Examples and Solved Problems; Author: Dr. Bharatendra Rai;https://www.youtube.com/watch?v=2n9NLZTIlz8;License: Standard YouTube License, CC-BY