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
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Chapter 14, Problem 1VC
Summary Introduction
Case Summary: This case deals with problems faced in sourcing. It describes about the sourcing strategy followed by Starwood.
Interpretation:The type of orientation required to be maintained with the suppliers to supply the items.
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One of your Taiwanese suppliers has bid on a new line of molded plastic parts that is currently being assembled at your plant. The supplier has bid $0.10 per part, given a forecast you provided of 200,000 parts in year 1; 300,000 in year 2; and 500,000 in year 3. Shipping and handling of parts from the supplier’s factory is estimated at $0.01 per unit. Additional inventory handling charges should amount to $0.005 per unit. Finally, administrative costs are estimated at $20 per month.
Although your plant is able to continue producing the part, the plant would need to invest in another molding machine, which would cost $10,000. Direct materials can be purchased for $0.05 per unit. Direct labor is estimated at $0.03 per unit plus a 50 percent surcharge for benefits; indirect labor is estimated at $0.011 per unit plus 50 percent benefits. Up-front engineering and design costs will amount to $30,000. Finally, management has insisted that overhead be allocated if the parts are made in-house…
One of your Taiwanese suppliers has bid on a new line of molded plastic parts that is currently being assembled at your plant. The
supplier has bid $0.10 per part, given a forecast you provided of 300,000 parts in year 1; 500,000 in year 2; and 700,000 in year 3.
Shipping and handling of parts from the supplier's factory is estimated at $0.03 per unit. Additional inventory handling charges
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Although your plant is able to continue producing the part, the plant would need to invest in another molding machine, which would
cost $10,000. Direct materials can be purchased for $0.04 per unit. Direct labor is estimated at $0.05 per unit for wages plus a 50
percent surcharge for benefits and, indirect labor is estimated at $0.013 per unit plus 50 percent benefits. Up-front engineering and
design costs will amount to $40,000. Finally, management has insisted that overhead be allocated if the parts are…
Why is it important to accept "uncertainty" when assessing supply chain processes?
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
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Similar questions
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