OPERATIONS MANAGEMENT
14th Edition
ISBN: 9781260961393
Author: Stevenson
Publisher: MCG
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Textbook Question
Chapter 13, Problem 16DRQ
What are some unforeseen costs of ERP?
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It is January 1 of year 0, and Merck is trying to determine whether to continue development of a newdrug. The following information is relevant. You can assume that all cash flows occur at the ends of therespective years.■ Clinical trials (the trials where the drug is tested on humans) are equally likely to be completed in year1 or 2.■ There is an 80% chance that clinical trials will succeed. If these trials fail, the FDA will not allow thedrug to be marketed.■ The cost of clinical trials is assumed to follow a triangular distribution with best case $100 million,most likely case $150 million, and worst case $250 million. Clinical trial costs are incurred at the end ofthe year clinical trials are completed.■ If clinical trials succeed, the drug will be sold for five years, earning a profit of $6 per unit sold.■ If clinical trials succeed, a plant will be built during the same year trials are completed. The cost of theplant is assumed to follow a triangular distribution with best case $1…
1) Under “Costs of Quality”, costs associated with quality can be classified into four categories: appraisal, prevention, internal failures, and external failures. The costs of quality for Corley Motors Logistics is given in the table.
Cost Elements
Amount
Checking outbound boxes for errors
$31,000
Quality planning
$10,625
Downtime due to conveyor/computer problems
$342,125
Incoming product inspection
$21,000
Customer complaint rework
$33,000
Correcting erroneous orders before shipping
$36,550
Quality training of associates
$25,925
Correction of typographical errors--pick tickets
$11,475
a) Classify the quality cost elements given in the table into the different quality cost categories (prevention, appraisal, internal failure, external failure).
b) Total the quality costs in each of the different quality cost categories (prevention, appraisal, internal failure, external failure).
c) Using a) and b), suggest which areas…
Note: In chapter 9, section 9.4 of the Stevenson text, the costs of quality are covered; chapter 9 Stevenson lecture power point slide 7 touches upon this topic; see lecture video, 3.55 mins to 4.54 mins.
2) The production process at Hansa Ceylon Coffee fills boxes with dark arabica coffee. The data for the fill weight (in ounces) of eight samples are presented below. A sample size of six was used. The firm’s operations analyst wants to construct X-bar and R-charts to monitor the filling process.
Sample
Sample Mean
Sample Range
1
15.80
0.42
2
16.10
0.38
3
16.02
0.08
4
15.95
0.15
5
16.12
0.42
6
16.18
0.23
7
15.87
0.36
8
16.20
0.40
a) Calculate the upper and lower control limits for the X-bar chart.
b) Calculate the upper and lower control limits for the R chart.
c) Is the process under control? Why or why not?
Note: In chapter 10, section 10.3 of the Stevenson text, control charts for variables are…
Chapter 13 Solutions
OPERATIONS MANAGEMENT
Ch. 13.11 - What is ERP?Ch. 13.11 - What are the three main reasons firms adopt ERP?Ch. 13.11 - What are some hidden costs of ERP?Ch. 13.11 - How does ERP fit with e-commerce and supply chain...Ch. 13 - Contrast independent and dependent demand.Ch. 13 - When is MRP appropriate?Ch. 13 - Briefly define or explain each of these terms: a....Ch. 13 - Prob. 4DRQCh. 13 - Prob. 5DRQCh. 13 - What is meant by the term safety time?
Ch. 13 - Prob. 7DRQCh. 13 - Briefly discuss the requirements for effective...Ch. 13 - Prob. 9DRQCh. 13 - How can the use of MRP contribute to productivity?Ch. 13 - Prob. 11DRQCh. 13 - What is lot sizing. what is its goal, and why is...Ch. 13 - Contrast planned-order receipts and scheduled...Ch. 13 - If seasonal variations are present, is their...Ch. 13 - Prob. 15DRQCh. 13 - What are some unforeseen costs of ERP?Ch. 13 - What trade-offs are involved in the decision to...Ch. 13 - Who in the organization needs to be involved in...Ch. 13 - Prob. 3TSCh. 13 - Prob. 1CTECh. 13 - Give one example of unethical behavior involving...Ch. 13 - a. Given the following diagram for a product,...Ch. 13 - Prob. 2PCh. 13 - Prob. 3PCh. 13 - Eighty units of end item E are needed at the...Ch. 13 - a. One hundred twenty units of end item Z are...Ch. 13 - A table is assembled using three components, as...Ch. 13 - Eighty units of end item X are needed at the...Ch. 13 - Oh No!, Inc., sells three models of radar detector...Ch. 13 - Assume that you are the manager of a shop that...Ch. 13 - Assume that you are the manager of Assembly, Inc....Ch. 13 - Determine material requirements plans for pans N...Ch. 13 - A firm that produces electric golf carts has just...Ch. 13 - Refer to Problem 12. Assume that unusually mild...Ch. 13 - Using the accompanying diagram, do the following:...Ch. 13 - A company that manufactures paving material for...Ch. 13 - Prob. 16PCh. 13 - The MRP Department has a problem. Its computer...Ch. 13 - Develop a material requirements plan for component...Ch. 13 - How many wheels sets should the manager order?Ch. 13 - When should the wheel sets be ordered?Ch. 13 - Prob. 2.1CQCh. 13 - Prob. 1OTQCh. 13 - Prob. 2OTQCh. 13 - Suppose the company has just received an order for...Ch. 13 - Prob. 4OTQCh. 13 - Prob. 5OTQ
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