Operations Management
13th Edition
ISBN: 9781259667473
Author: William J Stevenson
Publisher: McGraw-Hill Education
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Chapter 13, Problem 15P
A manufacturer of exercise equipment purchases the pulley section of the equipment from a supplier who lists these prices: less than 1,000. $5 each: 1,000 to 3,999, $4.95 each: 4,000 to 5,999, $4.90 each: and 6,000 or more, $4.85 each. Ordering costs and $50, annual carrying costs per unit are 40 percent of purchase cost, and annual usage is 4,900 pulleys. Determine an order quantity that will minimize total cost.
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Maxantene Products buys 300,000 units of a crucial input per year from a supplier that fulfills its orders within two days after receiving them. Maxantene Product submits its orders directly to the supplier through a Web interface, so its lead time is the supplier two day turnaround time. Each order cost Maxantene Products about P500 to place, while carrying cost are about P60 per unit per year. The company seek to maintain a five day usage level in a safety stock. Assume a 365 day year. -------------
a.What is Maxantene Products economic order quantity for this input?
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Cryolab Inc makes and sells a lawn fertilizer called Hypergro. The company has developed standard costs for one bag of Hypergro as follows:
Standard Quantity/Hours
Standard Price/Rate
Standard Cost per Bag
Direct Material
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₱ 0.75
₱18.75
Direct Labor
0.25 hours
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₱ 6.00
Total
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The company had no beginning inventories of any kind on January 1. Variable overhead is applied to production on the basis of standard direct labor hours. During January, the following activity was recorded by the company:
Production of Fastgro: 23,000 bags
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Direct labor worked: 5,800 hours at a cost of ₱397,300
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Inventory of direct materials on January 31: 8,000 pounds
Compute the variances and indicate whether it is FAVORABLE (F) or UNFAVORABLE (U) in your solution sheet.
The raw…
Franklin Tooling, Inc., manufactures specialty tooling for firms in the paper-making industry. All of their products are engineer-to-order and so the company never knows exactly what components to purchase for a tool until a customer places an order. However, the company believes that weekly demand for a few components is fairly stable. Component 135.AG is one such item. The last 26 weeks of historical use of component 135.AG is recorded below.
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Demand
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Demand
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128
149
136
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134
118
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131
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Use OM Explorer’s Time Series Forecasting Solver to evaluate the following forecasting methods. Start error measurement in the fifth week, so all methods are evaluated over the same time interval. Use the default settings for initial forecasts.i. Naïve (1-Period Moving Average)ii. 3-Period Moving Averageiii. Exponential Smoothing,…
Chapter 13 Solutions
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
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- Bradley Solutions and Alexander Limited are two well-established suppliers of inexpensive tools. Weekend Projects is a national chain of retail outlets that caters to the occasional fixer-upper who would prefer to get the job done fast rather than investing in a well-appointed tool box. Weekend Projects wants to find a supplier for a particular tool set that promises to be a big seller. Expected annual sales are 100,000 units (D). Weekend's warehouses operate 50 weeks a year. Management collected data on the two suppliers, which are contained in the table below: Annual Price/Unit Holding Cost/Unit Lead Time (L) (p) (wks) Supplier 10,000 25,000 50,000 Bradley $40,000 $26,000 $19,000 Alexander $30,000 $28,000 $17,000 $7.15 $7.15 a. Which of the two suppliers would provide the lowest annual cost to Weekend Projects? What shipping quantity would you suggest? and a shipping quantity of Using Annual Freight Costs Shipping Quantity (Q) -w an example Get more help. (H) $1.43 $1.43 6 4 Annual…arrow_forwardBradley Solutions and Alexander Limited are two well-established suppliers of inexpensive tools. Weekend Projects is a national chain of retail outlets that caters to the occasional fixer-upper who would prefer to get the job done fast rather than investing in a well-appointed tool box. Weekend Projects wants to find a supplier for a particular tool set that promises to be a big seller. Expected annual sales are 100,000 units (D). Weekend's warehouses operate 50 weeks a year. Management collected data on the two suppliers, which are contained in the table below: Annual Freight Costs Shipping Quantity (Q) Price/Unit Annual Holding Lead Time (L) Annual Supplier Bradley Alexander 50.000 $18,000 $17.000 Cost/Unit (H) $1.43 $1.43 10,000 25,000 (p) $7.15 (wks) Administrative Cost $40,000 $30,000 $26.000 $25.000 $15,000 S7.15 6 $10.000 a. Which of the two suppliers would provide the lowest annual cost to Weekend Projects? What shipping quantity would you suggest? Using and a shipping quantity…arrow_forwardBradley Solutions and Alexander Limited are two well-established suppliers of inexpensive tools. Weekend Projects is a national chain of retail outlets that caters to the occasional fixer-upper who would prefer to get the job done fast rather than investing in a well-appointed tool box. Weekend Projects wants to find a supplier for a particular tool set that promises to be a big seller. Expected annual sales are 100,000 units (D). Weekend's warehouses operate 50 weeks a year. Management collected data on the two suppliers, which are contained in the table below: Annual Freight Costs Shipping Quantity (Q) Price/Unit Annual Holding Lead Time (L) Cost/Unit (H) $1.43 $1.43 Annual Supplier Bradley 10,000 $40,000 50,000 $18,000 $25,000 $17,000 25,000 (p) S7.15 (wks) Administrative Cost $26.000 5 $15,000 Alexander $30,000 S7.15 $10.000 a. Which of the two suppliers would provide the lowest annual cost to Weekend Projects? What shipping quantity would you suggest? Using Alexander and a…arrow_forward
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