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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Chapter 14, Problem 2DQ
Summary Introduction
Interpretation: The impact of two opposing directives on supplier relationships and hence on supplier management should be concluded.
Concept Introduction: The orientation of
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Chrysler and General Motors vigorously compete with each other in many automobile and truck markets. When Jose Ignacio Lopez was vice president of purchasing for GM, he made it clear that his buyers were not to accept luncheon invitations from suppliers. Thomas Stalcamp, head of purchasing for Chrysler at the time, instructed his buyers to take suppliers to lunch. Rationalize these two directives in light of supplier relations and the impact on supply chain management.
To ensure a full line of outdoor clothing and accessories, the marketing department at Teddy Bower insists that they also sell waterproof hunting boots. Unfortunately, neither Teddy Bower nor Teddy Sports has expertise in manufacturing those kinds of boots. Therefore, Teddy Bower contacted several Chinese suppliers to request quotes. Due to competition, Teddy Bower knows that it cannot sell these boots for more than $54. However, $40 per boot was the best quote from the suppliers. In addition, Teddy Bower anticipates excess inventory will need to be sold off at a 50 percent discount at the end of the season. Given the $54 price, Teddy Bower’s demand forecast is for 400 boots, with a standard deviation of 300.
If Teddy Bower decides to include these boots in its assortment, how many boots should it order from its supplier?
Suppose Teddy Bower orders 380 boots. What would its expected profit be?
Ethics When firms implement a single sourcing policy
in their buying, other possible suppliers do not have an
opportunity to compete for the business. Is this ethi-
cal? What are the advantages to the company? What
are the disadvantages?
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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- Avion, Inc. Susan Dey and Bill Mifflin, procurement managers at Avion, Inc., sat across from each other and reviewed a troubling performance report concerning a key supplier, Foster Technologies. The report detailed the deteriorating performance of Foster Technologies in the areas of material quality and on-time delivery. At this point, Kevin ODonnell, another procurement manager, entered the room. Why can changes within a supply chain disrupt the normal flow of goods and services within a supply chain?arrow_forwardAvion, Inc. Susan Dey and Bill Mifflin, procurement managers at Avion, Inc., sat across from each other and reviewed a troubling performance report concerning a key supplier, Foster Technologies. The report detailed the deteriorating performance of Foster Technologies in the areas of material quality and on-time delivery. At this point, Kevin ODonnell, another procurement manager, entered the room. Explain the role of performance measurement in managing supply chain activities.arrow_forwardAvion, Inc. Susan Dey and Bill Mifflin, procurement managers at Avion, Inc., sat across from each other and reviewed a troubling performance report concerning a key supplier, Foster Technologies. The report detailed the deteriorating performance of Foster Technologies in the areas of material quality and on-time delivery. At this point, Kevin ODonnell, another procurement manager, entered the room. What parts of the supply chain are most closely involved with the situation in this case? What is the responsibility of each part in order to maintain a smooth flow of material?arrow_forward
- To ensure a full line of outdoor clothing and accessories, the marketing department at Teddy Bower insists that they also sell waterproof hunting boots. Unfortunately, neither Teddy Bower nor TeddySports has expertise in manufacturing those kinds of boots. Therefore, Teddy Bower contacted several Taiwanese suppliers to request quotes. Due to competition, Teddy Bower knows that it cannot sell these boots for more than $54. However, $40 per boot was the best quote from the suppliers. In addition, Teddy Bower anticipates excess inventory will need to be sold off at a 50 percent discount at the end of the season. Given the $54 price, Teddy Bower’s demand forecast is for 560 boots, with a standard deviation of 460.a. If Teddy Bower decides to include these boots in its assortment, how many boots should it order from its supplier?(Round your answer to nearest whole number.) _________b. Suppose Teddy Bower orders 540 boots. What would its expected profit be?(Round your answer to the nearest…arrow_forward5arrow_forwardTo ensure a full line of outdoor clothing and accessories, the marketing department at Teddy Bower insists that they also sell waterproof hunting boots. Unfortunately, neither Teddy Bower nor TeddySports has expertise in manufacturing those kinds of boots. Therefore, Teddy Bower contacted several Taiwanese suppliers to request quotes. Due to competition, Teddy Bower knows that it cannot sell these boots for more than $54. However, $40 per boots was the best quote from the suppliers. In addition, Teddy Bower anticipates excess inventory will need to be sold off at a 50 percent discount at the end of the season. Given the $54 price, Teddy Bower’s demand forecast is for 400 boots, with a standard deviation of 300. Questions: 1. If Teddy Bower decides to include these boots in its assortment, how many boots should it order from its supplier? 2. Suppose Teddy Bower orders 380 boots. What would its expected profit be? 3. John Briggs, a buyer in the procurement department, overheard at lunch…arrow_forward
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