Operations Management: Processes And Supply Chains (12th Edition) (what's New In Operations Management)
12th Edition
ISBN: 9780134742205
Author: Lee J. Krajewski, Manoj K. Malhotra, Larry P. Ritzman
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
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.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Bradley Solutions and Alexander Limited are two well-established suppliers of inexpensive tools.
Meanwhile, Weekend Projects is a national chain of retail outlets and 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)
Annual
Lead
Annual
Supplier
20,000
40,000 Price/unit(p)
Administrative
Holding
Cost/Unit(H) (L)(wks)
$1.5
$1.8
Time
Cost
Bradley $30,000 $20,000
Alexander $25,000 $22,000
$6
$5
$20,000
$30,000
4
What is the total annual cost for Weekend Projects if the company chooses Alexander as the
supplier and determines the shipping quantity at 40,000 units per shipment?
$608,600
O $609,600
$606,600
O $607,600
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…
Alison's Accessories is a high volume worldwide fashion house with outlets in 65 countries. Sadly, space does not permit an exhaustive list but once the test is over, check out their website. Kalil, the supply chain manager is conducting her usual thorough analysis of her final four candidates for supplier and has developed the following tables of pertinent costs and other shipping metrics. Regardless of supplier, Alison's Accessories will operate 220 days per year and has forecast annual demand of 250,000 units. Kalil has obtained quotes for three different shipment sizes (Freight Costs table). All costs are in US Dollars.
Table 1
Unit costs
Supplier Price/Unit Carrying Cost
A 123 22
B 125 19
C 126 18
D 100 40
Annual Freight Costs
Supplier 15,000 units 25,000 units 50,000 units
A 380,000 260,000 237,000
B 615,000 547,000 470,000
C 285,000 240,000 200,000
D 380,000 260,000 237,000
Other Costs
Supplier Lead Time Annual Admin Costs
A 30 250,000
B 15 275,000
C 7 225,000
D 90…
Chapter 14 Solutions
Operations Management: Processes And Supply Chains (12th Edition) (what's New In Operations Management)
Ch. 14 - Prob. 1DQCh. 14 - Prob. 2DQCh. 14 - Prob. 3DQCh. 14 - Prob. 4DQCh. 14 - Prob. 5DQCh. 14 - Prob. 1PCh. 14 - Eight Flags operates several amusement parks in...Ch. 14 - Prob. 3PCh. 14 - Beagle Clothiers uses a weighted score for the...Ch. 14 - Prob. 5P
Ch. 14 - Prob. 6PCh. 14 - Prob. 7PCh. 14 - Prob. 8PCh. 14 - Prob. 9PCh. 14 - Prob. 10PCh. 14 - Acadia Logistics anticipates that it will need...Ch. 14 - Prob. 12PCh. 14 - Prob. 13PCh. 14 - Prob. 1VCCh. 14 - Prob. 2VCCh. 14 - Prob. 3VCCh. 14 - Prob. 4VCCh. 14 - Prob. 1CCh. 14 - Prob. 2CCh. 14 - Prob. 3C
Knowledge Booster
Similar questions
- 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 planarrow_forwardLong detailed explanation using supply chain management and inventory management/project management theory and also include how each challenge would be addressed?arrow_forwardK 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 toarrow_forward
- Hi, We're looking to replace some of our associate learning and development (L&D) processes towards utilising Al (Artificial Intelligence). I've provided some data on three Al suppliers and the costs of our current L&D processes. Please could you let me know which supplier would give us the greatest savings after five years, if we were to replace our current L&D process with one of these Al systems? Al suppliers: Upfront cost: Annual license: Discount: Costs of current process: Resource Thanks, Ricardo Associate Payment Accommodation (Expenses) Transport (Expenses) Loopo Circuits £14,500.00 £5,820.00 £2,560.00 £1,440.00 Catering (Expenses) £480.00 Vovue Al £13,940.00 £7,300.00 15% off annual license £12,800.00 Cost (Average per Year) Select an option below to reply. Wazaar Cyber will be the cheapest supplier. However, even going with Wazaar, changing our process will not save us any money after five years. Loopo Circuits will be the cheapest supplier. In comparison to the current…arrow_forwardSingle and Multiple Suppliers. Discuss circumstances when either/both are needed and provide an example of each.arrow_forward1. Explain the picture of supply chain integration.arrow_forward
- Explain how the bullwhip measure can be applied to supply chain analysis?arrow_forwardDescribe how the bullwhip measure can be applied to supply chain analysis?arrow_forwardHorizon 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 60,000 units and Horizon's plant operates 250 days per year. The data for three suppliers are in the following table. D Annual Freight Costs Shipping Quantity (Q) Annual 10,000 $11,000 Supplier Abbott Baker Carpenter Price/Unit 20,000 (P) $8,500 $30 $6,500 $31 $5,500 Annual Holding Cost/Unit (H) $6.00 $6.20 Lead Time (L) (days) 4 7 Administrative Cost $11,000 $9.000 $9,000 $8,000 $29 $5.80 3 $8,000 Which supplier and shipping quantity will provide the lowest total cost for Horizon Cellular? Using and a shipping quantity of units is the lowest cost alternative, with annual total costs to Horizon Cellular of S. (Enter your response as an integer.)arrow_forward
- Describe some potential pitfalls in relying solely on the resultsof a factor-weighting analysis for supplier selection.arrow_forwardOEM tend to have one of four types of relationship with suppliers from arm's length to vertical integration. suggest reason an OEM may have for selecting each of these 4 types of relationships with suppliersarrow_forwardNo written by hand solution The questions below refer to the following SAME paragraph: Suppose a retailer Mojo, holds safety stock for an item to accommodate a 98% service level with uncertain demand. There are two supply options: Supplier X taking 5 days to deliver replenishments, and Supplier Y taking 3 days to replenish. Both suppliers charge the same price for the item. Ignoring differences in fixed order costs, the retailer should choose: Group of answer choices Supplier X Option Y only if the critical ratio is less than 0.9 Option X only if the critical ratio is greater than 0.9 Supplier Yarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
