Operations Management: Processes and Supply Chains, Student Value Edition Plus MyLab Operations Management with Pearson eText -- Access Card Package (12th Edition)
12th Edition
ISBN: 9780134855424
Author: Lee J. Krajewski, Manoj K. Malhotra, Larry P. Ritzman
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 2, Problem 3P
The operations manager at Sebago Manufacturing is considering three proposals for supplying a critical component for its new line of electric watercraft. Proposal 1 is to purchase the component; proposal 2 is to make the component in-house using rebuilt equipment; and proposal 3 is to purchase new, highly automated equipment. The costs associated with each proposal are provided in the accompanying table.
At what quantity range will each option be preferred?
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Given the preceding information, what are Jerry’s options? How should they be evaluated? Make assumptions where necessary.
Papaya Partners is a distributor of papayas. They purchase papayas from individual growers and package them in 10-pound cartons for delivery to their various customers, generally supermarkets. Last month, they budgeted to sell $500,000 worth of cartons at a price of $25 each. Actual sales met a budget of $500,000 at $25 per carton. The management has received cost information based on actual performance and needs to understand the drivers of the overall variance from the budget. They have asked you, as an analyst in their management accounting department, to calculate and explain the variances. The following data has been provided: Budget Cost of fruit @ 10 pounds per carton $ 200,000 Cost of packaging @ 1 pound per carton $ 10,000 Labor costs @ .5 hourse per carton $ 90,000 Total Cost $ 300,000 Actual Cost of fruit @ 10 pounds per carton $ 244,200 Cost of packaging @ .55 pound percarton$ 11,000 Labor costs @ .75 hourse per carton $ 150,000 Total Cost $405,200
WHAT IS THE STANDARD COST…
A purchasing manager is preparing a report to decide the supply strategy of component C5. Based on the
sales forecast range, production department is required to be prepared to provide between 2300 and 3000
components C5 per year (see graph).
$105,000.00
$100,000.00
$95,000.00
$90,000.00
$85,000.00
$80,000.00
$75,000.00
$70,000.00
L
--Yearly cost insource
17
2000 2100 2200 2300
2400
Yearly cost outsourcing
2500 2600
2700
2800
2900
3000
Chapter 2 Solutions
Operations Management: Processes and Supply Chains, Student Value Edition Plus MyLab Operations Management with Pearson eText -- Access Card Package (12th Edition)
Ch. 2 - Prob. 3DQCh. 2 - Prob. 4DQCh. 2 - Consider the range of processes in the financial...Ch. 2 - Prob. 6DQCh. 2 - Continuous improvement recognizes that many small...Ch. 2 - Prob. 8DQCh. 2 - Paul O’Neill, former U.S. Treasury Secretary,...Ch. 2 - Dr. Gulakowicz is an orthodontist. She estimates...Ch. 2 - Two different manufacturing processes are being...Ch. 2 - The operations manager at Sebago Manufacturing is...
Ch. 2 - Consider the Custom Molds, Inc., case at the end...Ch. 2 - Founded in 1970, ABC is one of the world’s...Ch. 2 - Prepare a flowchart of the field service division...Ch. 2 - Big Bob’s Burger Barn would like to graphically...Ch. 2 - Prob. 10PCh. 2 - Suppose you are in charge of a large mailing to...Ch. 2 - Diagrams of two self-service gasoline stations,...Ch. 2 - Prob. 13PCh. 2 - Prob. 14PCh. 2 - A time study of an employee assembling peanut...Ch. 2 - Prob. 18PCh. 2 - Prob. 19PCh. 2 - Prob. 20PCh. 2 - Prob. 21PCh. 2 - Prob. 22PCh. 2 - Prob. 23PCh. 2 - Smith, Schroeder, and Torn (SST) is a short-haul...Ch. 2 - Prob. 25PCh. 2 - Prob. 26PCh. 2 - Prob. 27PCh. 2 - Prob. 28PCh. 2 - Prob. 29PCh. 2 - Prob. 30PCh. 2 - Prob. 31PCh. 2 - Prob. 32PCh. 2 - Prob. 33PCh. 2 - Prob. 1AMECh. 2 - What percentage of overall complaints do the three...Ch. 2 - Prob. 3AMECh. 2 - Prob. 1VCCh. 2 - What are the benefits that the POI program can...Ch. 2 - Prob. 3VCCh. 2 - What are the major issues facing Tom and Mason...Ch. 2 - Prob. 1.2CCh. 2 - Prob. 1.3CCh. 2 - Prob. 2.1CCh. 2 - Prob. 2.2CCh. 2 - Prob. 2.3C
Additional Business Textbook Solutions
Find more solutions based on key concepts
There is a huge demand in the United States and elsewhere for affordable women’s clothing. Low-cost clothing re...
Loose-leaf for Operations Management (The Mcgraw-hill Series in Operations and Decision Sciences)
2. Identify four people who have contributed to the theory and techniques of operations management.
Operations Management: Sustainability and Supply Chain Management (12th Edition)
What are the three major business functions, and how are they related to one another? Give specific examples.
Operations Management, Binder Ready Version: An Integrated Approach
The flowchart for the process at the local car wash. Introduction: Flowchart: A flowchart is a visualrepresenta...
Principles Of Operations Management
2. Identify four people who have contributed to the theory and techniques of operations management.
Operations Management
Many companies including Company OM tried to implement dynamic pricing in their ticketing system. The dynamic p...
Principles of Operations Management: Sustainability and Supply Chain Management (10th Edition)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, operations-management and related others by exploring similar questions and additional content below.Similar questions
- 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_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 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_forward
- 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 should Sharon do in this situation?arrow_forwardPlastomer, Inc. specializes in the manufacture of high-grade plastic film used to wrap food products. Film is rejected and scrapped for a variety of reasons (e.g., opacity, high carbon content, incorrect thickness or gauge, scratches, and so on). During the past month, management collected data on the types of rejects and the amount of scrap generated by each type. The results are given in the following table. Compute percent of total amount for each type of failure to complete the table. (Enter your responses as percents rounded to one decimal place.) Type of Failure Amount of Scrap (Ibs.) Percent of Total Amount 1 Air bubbles 500 2 Bubble breaks 26,400 3 Carbon content 250 % 4 Unevenness 3,540 5 Thickness or gauge 3,640 % 6 Орacity 650 % 7 Scratches 10,810 8 Trim 700 % 9 Wrinkles 22,810 |%arrow_forwardPlastomer, Inc. specializes in the manufacture of high-grade plastic film used to wrap food products. Film is rejected and scrapped for a variety of reasons (e.g., opacity, high carbon content, incorrect thickness or gauge, scratches, and so on). During the past month, management collected data on the types of rejects and the amount of scrap generated by each type. The results are given in the following table. Compute percent of total amount for each type of failure to complete the table. (Enter your responses as percents rounded to one decimal place.) LOADING... Type of Failure Amount of Scrap (lbs.) Percent of Total Amount 1 Air bubbles 500 enter your response here% 2 Bubble breaks 25,500 enter your response here% 3 Carbon content 250 enter your response here% 4 Unevenness 3,680 enter your response here% 5 Thickness or…arrow_forward
- Break-even analysis is an important tool for managing any business, including colleges and universities. Identify 3 areas where break-even analysis might be used at a university. For each area, identify the revenues, fixed costs, and variable costs.arrow_forwardWhen creating an Event, which field reflects the current stage of the negotiating process and controls whether the rooms, space, and items will deduct from inventory?arrow_forwardanswer only letters D, E and Farrow_forward
- What the strategy should be for reviewing ESHS requirements in subcontractors and suppliers before contracting and how this is relevant in the selection process, also a strategy for develop a detailed plan and requirements that subcontractors and suppliers must achieve and implementing a monitoring process as well as comprehensive strategy to guarantee the accomplishment of ESHS requirements and consequences if subcontractors or suppliers do not accomplish them.arrow_forwardCarizick Co manufactures gaming products. It has created a new games console called the QpBox which is about to be launched. Demand for the QpBox is anticipated to be high. The product life cycle of the QpBox is expected to be three years with 300,000 units forecast to be sold during its first year. Sales volumes are expected to decrease by 75,000 units in each subsequent year. Production volumes will be based on expected demand levels. The following costs for the QpBox have been determined: Design and development Pre-launch advertising Advertising in Year 2 Packaging Manufacturing cost $120m $0.5m $0.4m $3 per unit $80 per unit At a recent board meeting, the finance director said that Carizick Co should look to maximise the profitability of the QpBox over its life cycle. The marketing director made the comment that Carizick Co should focus on extending the maturity phase of the life cycle only as this stage is where the QpBox is most profitable. Contract with Zone Co Carizick Co has…arrow_forwardDescribe the value chain of Harley Davidson company, with particular focus on the promised activities that they undertake to bring their product/service to market.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Purchasing and Supply Chain ManagementOperations ManagementISBN:9781285869681Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. PattersonPublisher:Cengage Learning
Practical Management ScienceOperations ManagementISBN:9781337406659Author:WINSTON, Wayne L.Publisher:Cengage,
Purchasing and Supply Chain Management
Operations Management
ISBN:9781285869681
Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:Cengage Learning
Practical Management Science
Operations Management
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:Cengage,
Inventory Management | Concepts, Examples and Solved Problems; Author: Dr. Bharatendra Rai;https://www.youtube.com/watch?v=2n9NLZTIlz8;License: Standard YouTube License, CC-BY