EBK OPERATIONS MANAGEMENT
EBK OPERATIONS MANAGEMENT
12th Edition
ISBN: 8220100283963
Author: Stevenson
Publisher: YUZU
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Chapter 2, Problem 3OTQ
Summary Introduction

Introduction:

USPS is the largest postal service organization in the world which handles 41% of the mails all around the world. It has around 760,000 workers with 300,000 mail collection boxes, 38,000 post offices, and 75,000 mail processing equipment.

The processing of first class mails is an automated process. The first class mail begins at an advanced facer cancellation system where the system itself cancels mails which do not carry the proper format. The rejected mails are processed manually. Next, the mails are processed through optical character readers which put the bar code on the mail. The local mails are processed separately.

Automation and the use of zip codes are the reasons for improvement in productivity. The USPS focuses on productivity, which is an important factor for keeping low postal rates and rapid delivery service. During 1980, USPS encountered a slowdown in the volume of mails due to increased competition from private delivery services.

With increased competition, USPS began to restructure the organization and change its strategy. USPS began to work closely with the customers and keep their costs low, improve productivity, and focus on the quality of the service. The reorganization helped the firm to overcome some of its potential challenges, cut down costs, and attract new businesses.

To determine: The impact of competitive pressure on USPS.

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Regular Period Time Overtime Supply Available puewag Subcontract Forecast 40 15 15 40 2 35 40 28 15 15 20 15 22 65 60 Initial inventory Regular-time cost per unit Overtime cost per unit Subcontract cost per unit 20 units $100 $150 $200 Carrying cost per unit per month 84
assume that the initial inventory has no holding cost in the first period, and back orders are not permitted. Allocating production capacity to meet demand at a minimum cost using the transportation method. The total cost is? (enter as whole number)
The S&OP team at Kansas Furniture, led by David Angelow, has received estimates of demand requirements as shown in the table. Assuming one-time stockout costs for lost sales of $125 per unit, inventory carrying costs of $30 per unit per month, and zero beginning and ending inventory, evaluate the following plan on an incremental cost basis: Plan B: Vary the workforce to produce the prior month's demand. Demand was 1,300 units in June. The cost of hiring additional workers is $35 per unit produced. The cost of layoffs is $60 per unit cut back. (Enter all responses as whole numbers.) Note: Both hiring and layoff costs are incurred in the month of the change (i.e., going from production of 1,300 in July to 1300 in August requires a layoff (and related costs) of 0 units in August). Hire Month 1 July Demand 1300 Production (Units) Layoff (Units) Ending Inventory Stockouts (Units) 2 August 1150 3 September 1100 4 October 1600 5 November 1900 6 December 1900
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