Operations Management: Processes and Supply Chains (11th Edition)
Operations Management: Processes and Supply Chains (11th Edition)
11th Edition
ISBN: 9780133872132
Author: Lee J. Krajewski, Manoj K. Malhotra, Larry P. Ritzman
Publisher: PEARSON
Question
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Chapter 14, Problem 6P

A

Summary Introduction

Interpretation: The supplier that provides services at the lowest annual cost should be found out.

Concept Introduction: Three suppliers have placed their bids for the company’s requirements. The bids are invited for the requirement of a shipping quantity of 20,000 bottles and an annual requirement of 40,000 units. The plant operates for 250 days a year.    

B

Summary Introduction

Interpretation: To filter the suppliers based on the scores they obtained in the score hurdle.

Concept Introduction: Three suppliers have placed their bids for the company’s requirements. The bids are invited for the requirement of a shipping quantity of 20,000 bottles and an annual requirement of 40,000 units. The plant operates for 250 days a year.    

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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
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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
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