Operations Management: Processes and Supply Chains, Student Value Edition Plus MyLab Operations Management with Pearson eText -- Access Card Package (11th Edition)
11th Edition
ISBN: 9780134111056
Author: Lee J. Krajewski, Manoj K. Malhotra, Larry P. Ritzman
Publisher: PEARSON
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Question
Chapter 14, Problem 1P
Summary Introduction
Interpretation: The shipping quantity and the supplier are to be determined that can provide the lowest total cost for the company.
Concept Introduction: The Company manufactures cell phones, exclusive for its network. In order for its new make, the company is to select a supplier of the circuit board. While the annual requirement of these components is 50,000 units, the manufacturing plant operates 250 days per year. There are three suppliers available with different options.
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Horizon Cellular manufactures cell phones for exclusive use in its communication network. Management must select a circuit board supplier for a new phone soon to be introduced to the market. The annual requirements (D) are 40,000 units and Horizon's plant operates 250 days per year. The data for three suppliers are in the attached table.
Annual Freight Costs
Shipping Quantity (Q)
Supplier
10,000
20,000
Price/Unit (p)
Annual Holding Cost/Unit (H)
Lead Time (L) (days)
Annual Administrative Cost
Material Costs
Abbott
$11,000
$8,500
$29
$5.80
4
$11,000
$232,000.00
Baker
$12,000
$9,500
$31
$6.20
3
$12,000
$1,240,000
Carpenter
$9,000
$7,000
$28
$5.60
8
$9,000
$1,120,000
Which supplier and shipping quantity will provide the lowest total cost for Horizon Cellular? Using the supplier [X] and a shipping quantity of [X] units is the lowest cost alternative, with annual total costs to Horizon Cellular of [X]. (Quantity and Annual Total Costs are integer…
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
K
Horizon Cellular manufactures cell phones for exclusive use in its communication network. Management must select a
circuit board supplier for a new phone soon to be introduced to the market. The annual requirements (D) are 50,000
units and Horizon's plant operates 250 days per year. The data for three suppliers are in the following table.
Supplier
Abbott
Baker
Carpenter
Annual Freight Costs
Shipping Quantity (Q)
Annual
Price/Unit Holding Cost/Unit
(P)
$31
$30
$29
Using
and a shipping quantity of
Horizon Cellular of $ (Enter your response as an integer.)
4
10,000
20,000
$12,000
$9,000
$8,000
$5,000
$9,000 $6,000
Which supplier and shipping quantity will provide the lowest total cost for Horizon Cellular?
(H)
$6.20
Lead
Time (L)
(days)
5
$6.00
$5.80
7
6
Annual
Administrative Cost
$12,000
$8,000
$9,000
units is the lowest cost alternative, with annual total costs to
Chapter 14 Solutions
Operations Management: Processes and Supply Chains, Student Value Edition Plus MyLab Operations Management with Pearson eText -- Access Card Package (11th Edition)
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