Operations Management (McGraw-Hill Series in Operations and Decision Sciences)
12th Edition
ISBN: 9780078024108
Author: William J Stevenson
Publisher: McGraw-Hill Education
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Chapter 15, Problem 2.1CQ
Summary Introduction
Case summary:
The case deals about Company B that is considering the approach of its purchasing agent. Its purchasing agent suggested outsourcing the manufacturing process for outrigger bracket. The operations of Company B are highly integrated even though they are operating separately. Trailer, paint and metal fabrication, and sand blast are the three major divisions of the firm. In addition to that, following information is given:
| Parts | Outsourcing cost | Company B's |
| T-67 | 14.60 | 17.92 |
| T-75 | 21.10 | 17.92 |
| T-69 | 18.50 | 45.20 |
| T-77 | 13.00 | 10.37 |
| T-70 | 41.00 | 58.69 |
| Total | 108.20 | 150.10 |
To determine: The recommendation for the company by analyzing the information.
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Sam's Pet Hotel operates 51 weeks per year, 6 days per week, and uses a continuous review inventory system. It purchases kitty litter for $11.00 per bag.
The following information is available about these bags:
> Demand
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> Order cost $52.00/order
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> Standard deviation of weekly demand = 15 bags
> Current on-hand inventory is 320 bags, with no open orders or backorders.
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Sam's Pet Hotel operates 50 weeks per year, 6 days per week, and uses a continuous review inventory system. It purchases kitty litter for $10.50 per bag.
The following information is available about these bags:
> Demand = 95 bags/week
> Order cost = $55.00/order
> Annual holding cost = 35 percent of cost
> Desired cycle-service level = 80 percent
> Lead time = 4 weeks (24 working days)
> Standard deviation of weekly demand = 15 bags
> Current on-hand inventory is 320 bags, with no open orders or backorders.
a. Suppose that the weekly demand forecast of 95 bags is incorrect and actual demand averages only 75 bags per week. How much higher will total
costs be, owing to the distorted EOQ caused by this forecast error?
The costs will be $ 10.64 higher owing to the error in EOQ. (Enter your response rounded to two decimal places.)
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does…
Chapter 15 Solutions
Operations Management (McGraw-Hill Series in Operations and Decision Sciences)
Ch. 15.2 - READING AT 3M, A LONG ROAD BECAME A SHORTER ROAD...Ch. 15.2 - READING AT 3M, A LONG ROAD BECAME A SHORTER ROAD...Ch. 15.9 - Prob. 1RQCh. 15.9 - Prob. 2RQCh. 15.9 - Prob. 3RQCh. 15.9 - Prob. 4RQCh. 15.9 - Prob. 5RQCh. 15.13 - Prob. 1RQCh. 15.13 - Prob. 2RQCh. 15.14 - Prob. 1RQ
Ch. 15.14 - Prob. 2RQCh. 15 - Prob. 1DRQCh. 15 - Prob. 2DRQCh. 15 - Prob. 3DRQCh. 15 - Prob. 4DRQCh. 15 - Prob. 5DRQCh. 15 - Prob. 6DRQCh. 15 - Prob. 7DRQCh. 15 - Prob. 8DRQCh. 15 - Prob. 9DRQCh. 15 - Prob. 10DRQCh. 15 - Prob. 11DRQCh. 15 - Prob. 12DRQCh. 15 - Prob. 13DRQCh. 15 - Prob. 14DRQCh. 15 - Prob. 15DRQCh. 15 - Prob. 16DRQCh. 15 - Prob. 17DRQCh. 15 - Prob. 18DRQCh. 15 - Prob. 19DRQCh. 15 - Prob. 20DRQCh. 15 - Prob. 21DRQCh. 15 - Prob. 1TSCh. 15 - Prob. 2TSCh. 15 - Prob. 3TSCh. 15 - Prob. 1CTECh. 15 - Prob. 2CTECh. 15 - Prob. 3CTECh. 15 - Prob. 4CTECh. 15 - A manager at Strateline Manufacturing must choose...Ch. 15 - Prob. 2PCh. 15 - A manager must make a decision on shipping. There...Ch. 15 - Prob. 1.1CQCh. 15 - Prob. 1.2CQCh. 15 - Prob. 2.1CQ
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