OPERATIONS MANAGEMENT CUSTOM ACCESS
11th Edition
ISBN: 9780135622438
Author: KRAJEWSKI
Publisher: PEARSON EDUCATION (COLLEGE)
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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
should amount to $0.004 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 $0.04 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 CUSTOM ACCESS
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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