Midlife Shoes, Inc, is a manufacturer of sensible shoes for aging baby-boomers. The company is having great success, and although demand is seasonal, it is expected to increase steadily over the next few years. The company is purchasing a new facility to accommodate the increase in demand, but the facility will not open until 13 months from now. The current facility can only accommodate 15 workers. Hiring and firing costs are negligible. Using the information below, help Midlife manage this transition year by deriving a production plan that will meet demand at the lowest cost. With the limited workforce size, neither chase demand nor level production is viable.
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- Scenario 4 Sharon Gillespie, a new buyer at Visionex, Inc., was reviewing quotations for a tooling contract submitted by four suppliers. She was evaluating the quotes based on price, target quality levels, and delivery lead time promises. As she was working, her manager, Dave Cox, entered her office. He asked how everything was progressing and if she needed any help. She mentioned she was reviewing quotations from suppliers for a tooling contract. Dave asked who the interested suppliers were and if she had made a decision. Sharon indicated that one supplier, Apex, appeared to fit exactly the requirements Visionex had specified in the proposal. Dave told her to keep up the good work. Later that day Dave again visited Sharons office. He stated that he had done some research on the suppliers and felt that another supplier, Micron, appeared to have the best track record with Visionex. He pointed out that Sharons first choice was a new supplier to Visionex and there was some risk involved with that choice. Dave indicated that it would please him greatly if she selected Micron for the contract. The next day Sharon was having lunch with another buyer, Mark Smith. She mentioned the conversation with Dave and said she honestly felt that Apex was the best choice. When Mark asked Sharon who Dave preferred, she answered, Micron. At that point Mark rolled his eyes and shook his head. Sharon asked what the body language was all about. Mark replied, Look, I know youre new but you should know this. I heard last week that Daves brother-in-law is a new part owner of Micron. I was wondering how soon it would be before he started steering business to that company. He is not the straightest character. Sharon was shocked. After a few moments, she announced that her original choice was still the best selection. At that point Mark reminded Sharon that she was replacing a terminated buyer who did not go along with one of Daves previous preferred suppliers. What does the Institute of Supply Management code of ethics say about financial conflicts of interest?arrow_forwardScenario 4 Sharon Gillespie, a new buyer at Visionex, Inc., was reviewing quotations for a tooling contract submitted by four suppliers. She was evaluating the quotes based on price, target quality levels, and delivery lead time promises. As she was working, her manager, Dave Cox, entered her office. He asked how everything was progressing and if she needed any help. She mentioned she was reviewing quotations from suppliers for a tooling contract. Dave asked who the interested suppliers were and if she had made a decision. Sharon indicated that one supplier, Apex, appeared to fit exactly the requirements Visionex had specified in the proposal. Dave told her to keep up the good work. Later that day Dave again visited Sharons office. He stated that he had done some research on the suppliers and felt that another supplier, Micron, appeared to have the best track record with Visionex. He pointed out that Sharons first choice was a new supplier to Visionex and there was some risk involved with that choice. Dave indicated that it would please him greatly if she selected Micron for the contract. The next day Sharon was having lunch with another buyer, Mark Smith. She mentioned the conversation with Dave and said she honestly felt that Apex was the best choice. When Mark asked Sharon who Dave preferred, she answered, Micron. At that point Mark rolled his eyes and shook his head. Sharon asked what the body language was all about. Mark replied, Look, I know youre new but you should know this. I heard last week that Daves brother-in-law is a new part owner of Micron. I was wondering how soon it would be before he started steering business to that company. He is not the straightest character. Sharon was shocked. After a few moments, she announced that her original choice was still the best selection. At that point Mark reminded Sharon that she was replacing a terminated buyer who did not go along with one of Daves previous preferred suppliers. Ethical decisions that affect a buyers ethical perspective usually involve the organizational environment, cultural environment, personal environment, and industry environment. Analyze this scenario using these four variables.arrow_forwardScenario 4 Sharon Gillespie, a new buyer at Visionex, Inc., was reviewing quotations for a tooling contract submitted by four suppliers. She was evaluating the quotes based on price, target quality levels, and delivery lead time promises. As she was working, her manager, Dave Cox, entered her office. He asked how everything was progressing and if she needed any help. She mentioned she was reviewing quotations from suppliers for a tooling contract. Dave asked who the interested suppliers were and if she had made a decision. Sharon indicated that one supplier, Apex, appeared to fit exactly the requirements Visionex had specified in the proposal. Dave told her to keep up the good work. Later that day Dave again visited Sharons office. He stated that he had done some research on the suppliers and felt that another supplier, Micron, appeared to have the best track record with Visionex. He pointed out that Sharons first choice was a new supplier to Visionex and there was some risk involved with that choice. Dave indicated that it would please him greatly if she selected Micron for the contract. The next day Sharon was having lunch with another buyer, Mark Smith. She mentioned the conversation with Dave and said she honestly felt that Apex was the best choice. When Mark asked Sharon who Dave preferred, she answered, Micron. At that point Mark rolled his eyes and shook his head. Sharon asked what the body language was all about. Mark replied, Look, I know youre new but you should know this. I heard last week that Daves brother-in-law is a new part owner of Micron. I was wondering how soon it would be before he started steering business to that company. He is not the straightest character. Sharon was shocked. After a few moments, she announced that her original choice was still the best selection. At that point Mark reminded Sharon that she was replacing a terminated buyer who did not go along with one of Daves previous preferred suppliers. What should Sharon do in this situation?arrow_forward
- Scenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing expenditures for packaging materials with Jeff Joyner. Ben was particularly disturbed about the amount spent on corrugated boxes purchased from Southeastern Corrugated. Ben said, I dont like the salesman from that company. He comes around here acting like he owns the place. He loves to tell us about his fancy car, house, and vacations. It seems to me he must be making too much money off of us! Jeff responded that he heard Southeastern Corrugated was going to ask for a price increase to cover the rising costs of raw material paper stock. Jeff further stated that Southeastern would probably ask for more than what was justified simply from rising paper stock costs. After the meeting, Ben decided he had heard enough. After all, he prided himself on being a results-oriented manager. There was no way he was going to allow that salesman to keep taking advantage of Coastal Products. Ben called Jeff and told him it was time to rebid the corrugated contract before Southeastern came in with a price increase request. Who did Jeff know that might be interested in the business? Jeff replied he had several companies in mind to include in the bidding process. These companies would surely come in at a lower price, partly because they used lower-grade boxes that would probably work well enough in Coastal Products process. Jeff also explained that these suppliers were not serious contenders for the business. Their purpose was to create competition with the bids. Ben told Jeff to make sure that Southeastern was well aware that these new suppliers were bidding on the contract. He also said to make sure the suppliers knew that price was going to be the determining factor in this quote, because he considered corrugated boxes to be a standard industry item. Is Ben Gibson acting legally? Is he acting ethically? Why or why not?arrow_forwardScenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing expenditures for packaging materials with Jeff Joyner. Ben was particularly disturbed about the amount spent on corrugated boxes purchased from Southeastern Corrugated. Ben said, I dont like the salesman from that company. He comes around here acting like he owns the place. He loves to tell us about his fancy car, house, and vacations. It seems to me he must be making too much money off of us! Jeff responded that he heard Southeastern Corrugated was going to ask for a price increase to cover the rising costs of raw material paper stock. Jeff further stated that Southeastern would probably ask for more than what was justified simply from rising paper stock costs. After the meeting, Ben decided he had heard enough. After all, he prided himself on being a results-oriented manager. There was no way he was going to allow that salesman to keep taking advantage of Coastal Products. Ben called Jeff and told him it was time to rebid the corrugated contract before Southeastern came in with a price increase request. Who did Jeff know that might be interested in the business? Jeff replied he had several companies in mind to include in the bidding process. These companies would surely come in at a lower price, partly because they used lower-grade boxes that would probably work well enough in Coastal Products process. Jeff also explained that these suppliers were not serious contenders for the business. Their purpose was to create competition with the bids. Ben told Jeff to make sure that Southeastern was well aware that these new suppliers were bidding on the contract. He also said to make sure the suppliers knew that price was going to be the determining factor in this quote, because he considered corrugated boxes to be a standard industry item. As the Marketing Manager for Southeastern Corrugated, what would you do upon receiving the request for quotation from Coastal Products?arrow_forwardCharles Lackey operates a bakery in Idaho Falls,Idaho. Because of its excellent product and excellent location,demand has increased by 25% in the last year. On far too manyoccasions, customers have not been able to purchase the bread oftheir choice. Because of the size of the store, no new ovens can beadded. At a staff meeting, one employee suggested ways to loadthe ovens differently so that more loaves of bread can be baked atone time. This new process will require that the ovens be loadedby hand, requiring additional manpower. This is the only thingto be changed. If the bakery makes 1,500 loaves per month witha labor productivity of 2.344 loaves per labor-hour, how manyworkers will Lackey need to add? (Hint: Each worker works160 hours per month.)arrow_forward
- Two items are omitted from each of the following three lists of cost of goods sold data from a manufacturing company income statement. Determine the amounts of the missing items, identifying them by letter. Finished goods Inventory,June1 $61,600 $46,200 (e) Cost of goods manufactured 329,000 (c ) 484,800 Cost of finished goods available for sales (a) $260,400 $540,000 Finished goods Inventory ,June30 72,800 61,600 (f) Cost of goods sold (b) (d) $513,600arrow_forwardPalisades Eco-Park is a small ecological reserve that admits a relatively small number of visitors on any day, but provides both educational and entertaining lectures, exhibitions, and opportunities to observe nature. The company has collected the following data on labor costs and number of visitors to the park over the last 30 months. Month Labor Cost Visitors 1 $ 26,720 2,600 2 $ 37,555 3,964 3 $ 41,361 4,299 4 $ 32,751 3,398 5 $ 36,022 3,630 6 $ 33,811 3,336 7 $ 33,139 3,372 8 $ 39,671 4,093 9 $ 39,912 4,222 10 $ 48,568 5,463 11 $ 43,627 4,551 12 $ 40,390 4,289 13 $ 35,644 3,694 14 $ 34,330 3,573 15 $ 38,260 3,836 16 $ 27,424 3,210 17 $ 31,732 5,195 18 $ 31,005 4,260 19 $ 28,552 3,689 20 $ 31,049 4,546 21 $ 26,588 3,058 22 $ 25,515 2,744 23 $ 29,899 4,997 24 $ 31,204 5,838 25 $ 29,099 3,964 26 $ 32,795 5,007 27 $ 29,650 4,572 28 $ 30,970 4,665 29 $ 29,429 3,841 30 $ 28,846 3,174 Required: a. Estimate the labor…arrow_forwardMary Williams, owner of Williams Products, is evaluating whether to introduce a new product line. After thinking through the production process and the costs of raw materials and new equipment, Williams estimates the variable costs of each unit produced and sold at $8 and the fixed costs per year at $70,000. If the selling price is set at $22 each, how many units must be produced and sold for Williams to break even? Use algebraic approach to get your answer.arrow_forward
- Juniper Design, provides design services to residential developers. Last year, the company had net operating income of $470,000 on sales of $1,400,000. The company's average operating assets were $1,600,000 and its minimum required rate of return was 14%. Required: Compute the company's residual income. Residual incomearrow_forwardExercise 3 Costs for a month in which it produced 800 units. The production manager was asked to review these costs and provide her best guess as to how they should be categorized. He responded with the following information: Total Costs Variable Costs Fixed Costs Material used in Production OMR 420000 420000 Labour, used in Production 214000 100000 114000 (Assembly and supervisor) Production Facilities cost( rent 115000 90000 250000 „Insurance, Utilities,.) Total production cost 749000 610000 139000 Required: A. Describe the production costs in the equation form Y = f + vX B. Assume Company intends to produce 1200 units next month. Calculate total production costs for the month.arrow_forwardWhat are the benefits of supply base optimization?arrow_forward
- MarketingMarketingISBN:9780357033791Author:Pride, William MPublisher:South Western Educational PublishingPractical Management ScienceOperations ManagementISBN:9781337406659Author:WINSTON, Wayne L.Publisher:Cengage,Purchasing and Supply Chain ManagementOperations ManagementISBN:9781285869681Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. PattersonPublisher:Cengage Learning