Operations Management: Processes And Supply Chains (12th Global Edition) - Does Not Include Mylab Operations Management
12th Edition
ISBN: 9780134890357
Author: Lee J. Krajewski, Manoj K. Malhotra
Publisher: Pearson Global Edition
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Chapter 15, Problem 10P
Summary Introduction
Interpretation: On the condition that there will be 10,000 phones shipped each month, the difference between monthly shipping charges each month is to be calculated.
Concept Introduction: The Company has decided to incorporate the packaging of its phones in a much smaller and recyclable package. Further, the company has also decided to stop its shipping practices along with a user manual because it decided to make the manual available online.
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A Southern Georgia school district is considering ordering 58 propane-fueled school buses. "They're healthier, they're cleaner burning, and they're much quieter than the diesel option," said a school administrator. Propane-powered buses also reduce greenhouse gasses by 25% compared to gasoline-powered buses and 8% compared to diesel ones. But they come at a premium—$97,000 for a propane model, $17,000more than the diesel equivalent.
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Chapter 15 Solutions
Operations Management: Processes And Supply Chains (12th Global Edition) - Does Not Include Mylab Operations Management
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- 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. As the Marketing Manager for Southeastern Corrugated, what would you do upon receiving the request for quotation from Coastal Products?arrow_forwardA Southern Georgia school district is considering ordering 57 propane-fueled school buses. "They're healthier, they're cleaner burning, and they're much quieter than the diesel option," said a school administrator. Propane-powered buses also reduce greenhouse gasses by 24% compared to gasoline-powered buses and 7% compared to diesel ones. But they come at a premium—$105,000 for a propane model, $10,000 more than the diesel equivalent. The propane bus operating cost (above and beyond fuel cost) is 35 cents/mile, compared to 45 cents for the diesel. Diesel fuel costs about $4/gallon in Georgia, about $1 more than propane. Bus mileage is 9 mpg for the propane model vs. 8 mpg for diesel. The life of a school bus in the district averages 11 years, and each bus travels an average of 37,000 miles per year because the district is so large and rural. Which bus is the better choice based on a life-cycle analysis? Calculate the fuel cost for the propane-fueled bus. Use…arrow_forwardMonczka-Trent Shipping is the logistics vendorfor Handfield Manufacturing Co. in Ohio. Handfield hasdaily shipments of a power-steering pump from its Ohio plantto an auto assembly line in Alabama. The value of the standard shipment is $250,000. Monczka-Trent has two options:(1) its standard 2-day shipment or (2) a subcontractor whowill team drive overnight with an effective delivery of one day.The extra driver costs $175. Handfield’s holding cost is 35%annually for this kind of inventory.a) Which option is more economical?b) What production issues are not included in the datapresented?arrow_forward
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