Operations Management: Processes and Supply Chains, Student Value Edition Plus MyLab Operations Management with Pearson eText -- Access Card Package (11th Edition)
11th Edition
ISBN: 9780134111056
Author: Lee J. Krajewski, Manoj K. Malhotra, Larry P. Ritzman
Publisher: PEARSON
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Textbook Question
Chapter 4, Problem 15P
MKM International is seeking to purchase a new CNC machine in order to reduce costs. Two alternative machines are in consideration. Machine 1 costs $500,000 but yields a 15 percent savings over the current machine used. Machine 2 costs $900,000 but yields a 25 percent savings over the current machine used. In order to meet demand, the following
- Based on the
NPV of the cash flows for these five years, which machine should MKM International Purchase? Assume a discount rate of 12 percent. - If MKM International lowered its required discount rate to 8 percent, what machine would it purchase?
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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:
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> Order cost $52.00/order
> Annual holding cost = 25 percent of cost
> Desired cycle-service level = 80 percent
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> Current on-hand inventory is 320 bags, with no open orders or backorders.
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higher owing to the error in EOQ. (Enter your response rounded to two decimal places.)
Chapter 4 Solutions
Operations Management: Processes and Supply Chains, Student Value Edition Plus MyLab Operations Management with Pearson eText -- Access Card Package (11th Edition)
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