Purchasing and Supply Chain Management
6th Edition
ISBN: 9781285869681
Author: Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher: Cengage Learning
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Chapter 7, Problem 1DQ
Summary Introduction
To discuss: Why organizations commit time and resources to evaluate suppliers.
Introduction: Supply management is the process of managing the suppliers and raw materials or resources that are essential for the organization’s operations.
Expert Solution & Answer
Explanation of Solution
Discuss why organizations commit time and resources to evaluate suppliers:
Evaluation of suppliers is important for any firm to choose the effective suppliers. It will help the firm to increase the market share and to improve the profit of the firm.
The firm might end up choosing ineffective or poor supplier if it does not evaluate the factors before choosing a supplier. A bad supplier will bankrupt the company through poor product quality and costly products.
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Problem 1 (20 Points)
Davison Electronics manufactures three LED television monitors, identified as Model A, Model B, and Model C. Davison Electronics four manufacturing plants. Each model has its lowest possible production cost when produced at Plant 1. However, Plant 1 does not have the capacity to handle the total production of all three models. As a result, at least some of the production must be routed to the other manufacturing plants. The following table shows the minimum production requirements for next month, the plant capacities in units per month, and the production cost per unit at each plant:
Model
Production Cost per Unit
Minimum Production Requirements
Plant 1
Plant 2
Plant 3
Plant 4
A
$25
$28
$37
$34
48,000
B
$26
$35
$36
$41
75,000
C
$20
$31
$26
$23
60,000
Production Capacity
65,000
50,000
32,000
43,000
Davison’s objective is to determine the cost-minimizing production plan.
Without…
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Does Nike Corporation's emphasis on lean operations help the Vietnamese workforce that still earns $150.00 minimum wage a month since 2014?
Chapter 7 Solutions
Purchasing and Supply Chain Management
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