Concept explainers
a)
To determine: The optimal plan using the transportation method.
Introduction: Aggregate planning using transportation method helps to attain minimum cost using the optimal plan. The major advantage of transportation method is to achieve the optimal solution using optimal plans.
b)
To determine: The total cost of the optimal plan.
Introduction: Aggregate planning using transportation method helps to attain minimum cost using the optimal plan. The major advantage of transportation method is to achieve the optimal solution using optimal plans.
c)
To determine: The number of units remained unused in regular time capacity.
Introduction: Aggregate planning using transportation method helps to attain minimum cost using the optimal plan. The major advantage of transportation method is to achieve the optimal solution using optimal plans.
d)
To determine: The extent of backordering in units and dollars.
Introduction: Aggregate planning using transportation method helps to attain minimum cost using the optimal plan. The major advantage of transportation method is to achieve the optimal solution using optimal plans.
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EBK PRINCIPLES OF OPERATIONS MANAGEMENT
- Scenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing expenditures for packaging materials with Jeff Joyner. Ben was particularly disturbed about the amount spent on corrugated boxes purchased from Southeastern Corrugated. Ben said, I dont like the salesman from that company. He comes around here acting like he owns the place. He loves to tell us about his fancy car, house, and vacations. It seems to me he must be making too much money off of us! Jeff responded that he heard Southeastern Corrugated was going to ask for a price increase to cover the rising costs of raw material paper stock. Jeff further stated that Southeastern would probably ask for more than what was justified simply from rising paper stock costs. After the meeting, Ben decided he had heard enough. After all, he prided himself on being a results-oriented manager. There was no way he was going to allow that salesman to keep taking advantage of Coastal Products. Ben called Jeff and told him it was time to rebid the corrugated contract before Southeastern came in with a price increase request. Who did Jeff know that might be interested in the business? Jeff replied he had several companies in mind to include in the bidding process. These companies would surely come in at a lower price, partly because they used lower-grade boxes that would probably work well enough in Coastal Products process. Jeff also explained that these suppliers were not serious contenders for the business. Their purpose was to create competition with the bids. Ben told Jeff to make sure that Southeastern was well aware that these new suppliers were bidding on the contract. He also said to make sure the suppliers knew that price was going to be the determining factor in this quote, because he considered corrugated boxes to be a standard industry item. Is Ben Gibson acting legally? Is he acting ethically? Why or why not?arrow_forwardScenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing expenditures for packaging materials with Jeff Joyner. Ben was particularly disturbed about the amount spent on corrugated boxes purchased from Southeastern Corrugated. Ben said, I dont like the salesman from that company. He comes around here acting like he owns the place. He loves to tell us about his fancy car, house, and vacations. It seems to me he must be making too much money off of us! Jeff responded that he heard Southeastern Corrugated was going to ask for a price increase to cover the rising costs of raw material paper stock. Jeff further stated that Southeastern would probably ask for more than what was justified simply from rising paper stock costs. After the meeting, Ben decided he had heard enough. After all, he prided himself on being a results-oriented manager. There was no way he was going to allow that salesman to keep taking advantage of Coastal Products. Ben called Jeff and told him it was time to rebid the corrugated contract before Southeastern came in with a price increase request. Who did Jeff know that might be interested in the business? Jeff replied he had several companies in mind to include in the bidding process. These companies would surely come in at a lower price, partly because they used lower-grade boxes that would probably work well enough in Coastal Products process. Jeff also explained that these suppliers were not serious contenders for the business. Their purpose was to create competition with the bids. Ben told Jeff to make sure that Southeastern was well aware that these new suppliers were bidding on the contract. He also said to make sure the suppliers knew that price was going to be the determining factor in this quote, because he considered corrugated boxes to be a standard industry item. As the Marketing Manager for Southeastern Corrugated, what would you do upon receiving the request for quotation from Coastal Products?arrow_forwardAdvise the MD, providing detailed explanation using the table above.arrow_forward
- please help to answer below questionarrow_forwardAcadia Logistics anticipates that it will need more distribution center space to accommodate what it believes will be a significant increase in demand for its final-mile services. Acadia could either lease public warehouse space to cover all levels of demand or construct its own distribution center to meet a specified level of demand, and then use public warehousing to cover the rest. The yearly cost of building and operating its own facility, including the amortized cost of construction, is $15.00 per square foot. The yearly cost of leasing public warehouse space is $24.50 per square foot. E Click the icon to view the expected demand requirements. a. The expected value of leasing public warehouse space as required by demand is S (Enter your response as a whole number.) More Info Requirements (in sq. ft) Probability 230,000 430,000 630,000 830,000 0.35 0.4 0.2 0.05 Print Donearrow_forward3 Problems seen in the situation of the Company: 1. It does not earn too much but it makes sales enough for maintenance, salaries, income, and savings. 2. Company B makes use of a traditional inventory wherein they manually count their stocks and money. 3. They only have one supplier for liquors. For other supplies which are accessible, they usually buy from the wet market nearby. Proposed Solutions: Solution for no. 1- Digital marketing Solution for no. 2 – Perpetual Inventory System Solution for no. 3 – Supplier Quality Management System Hello, can someone help me? How am I going to create a decomposition diagram for these three solutions?arrow_forward
- Operation management Hansen is interested in leasing a sports-utility vehicle and has contacted three automobile dealers for pricing information. Each dealer offered Hansen a 24-month lease with no down payment due at the time of signing. Each lease includes a monthly cost, mileage allowances, and the cost for additional miles. The details are given in the below table. Hansen decided to choose the lease option that will minimize his total 24-month cost. He is not sure how many miles he will drive in the next two years. Hence, for the purpose of decision, assume that Jase wants to evaluate options of driving 20,000 miles per year, 23,000 miles per year, and 25,000 miles per year. a. What is the decision, and what is the chance event?b. Construct a payoff table for Hansen’s problem.arrow_forwardRam Roy's firm has developed the following supply, demand, cost, and inventory data. Allocate production capacity to meet demand at a minimum cost using the transportation method. What is the cost? Assume that the initial inventory has no holding cost in the first period and backorders are not permitted. supply available period initial inventory regular-time cost per unit Overtime cost per unit subcointract cost per unit carrying cost per unit per month 1 2 3 Regular Tim overtime subcontrac demand forecast 30 35 30 15 $ LA LA LA L $ $ $ 90.00 110.00 120.00 3.00 15 10 10 5 5 5 50 50 40arrow_forwardExpress Logistics provides delivery service seven days a week. The daily requirements (in workers) are estimated as follows: Day M T Requirement 5 4 W 7 ΤΗ 3 F 6 S 3 SU 3 Each employee works five days a week and must have two consecutive days off, according to the contract. a. What is the minimum number of employees required? (If there is a tie in the selection of off days, S and SU days are given a preference). b. What is the worker schedule? You should show the schedule for each employee (stating their start day and the off days clearly).arrow_forward
- Q2. A pizza delivery service has decided to open a branch near off-campus student housing. The project manager has identified five student apartment complexes in the northwest area of the city, the locations of which, on an xy coordinate grid in miles, are P, (1, 2), P2(2, 6), P3 (3,arrow_forwardplease answer in 30 mins. do no attempt if not sure.arrow_forwardRam Roy’s firm has developed the following supply, demand, cost, and inventory data. Allocate production capacity to meet demand at a minimum cost using the transportation method. What is the cost? Assume that the initial inventory has no holding cost in the first period and backorders are not permitted. Initial Inventory 20 Units Regular Time cost per unit $100 Overtime cost per unit $160 Sub contract cost per unit $250 Carrying cost per unit per month $6 Supply Table Period Regular Time Overtime Subcontract Demand Forecast 1 30 15 5 40 2 30 15 5 45 3 40 15 5 55arrow_forward
- Practical Management ScienceOperations ManagementISBN:9781337406659Author:WINSTON, Wayne L.Publisher:Cengage,Purchasing and Supply Chain ManagementOperations ManagementISBN:9781285869681Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. PattersonPublisher:Cengage Learning