The possible reason why the supplier might have sent the clock to Person BJ and his wife. Case summary: Person BJ was just arriving back from lunch when the phone ran in which his wife explained about a clock being gifted to their home. Person BJ asked his wife Person N to repack the clock as it was sent by a supplier who was looking to win the contract from the company Person BJ is working in. Purchasing ethics: Purchasing professionals are a vital asset to an organization. The process involved in purchasing items for a company is vital for its success. A strict code of ethics is essential for the purchasing department to ensure that all vendors are treated equally.

Question

Question content area Part 1 Oakwood Hospital is considering using ABC analysis to classify laboratory SKUs into three categories: those that will be delivered daily from their supplier (Class A items), those that will be controlled using a continuous review system (B items), and those that will be held in a two bin system (C items). The following table shows the annual dollar usage for a sample of eight SKUs. Fill in the blanks for annual dollar usage below. (Enter your responses rounded to the nearest whole number.) Part 2 Rank the SKUs in descending order on the basis of their annual dollar usage and fill in the table with the ranked SKU's percentage of dollar usage. (Enter your responses rounded to two decimal places.)

Answer 1

Question

Chapter C, Problem 5.3SA

Summary Introduction

To explain: The possible reason why the supplier might have sent the clock to Person BJ and his wife.

Case summary:

Person BJ was just arriving back from lunch when the phone ran in which his wife explained about a clock being gifted to their home. Person BJ asked his wife Person N to repack the clock as it was sent by a supplier who was looking to win the contract from the company Person BJ is working in.

Purchasing ethics:

Purchasing professionals are a vital asset to an organization. The process involved in purchasing items for a company is vital for its success. A strict code of ethics is essential for the purchasing department to ensure that all vendors are treated equally.

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Question content area Part 1 Oakwood Hospital is considering using ABC analysis to classify laboratory SKUs into three categories: those that will be delivered daily from their supplier (Class A items), those that will be controlled using a continuous review system (B items), and those that will be held in a two bin system (C items). The following table shows the annual dollar usage for a sample of eight SKUs. Fill in the blanks for annual dollar usage below. (Enter your responses rounded to the nearest whole number.) Part 2 Rank the SKUs in descending order on the basis of their annual dollar usage and fill in the table with the ranked SKU's percentage of dollar usage. (Enter your responses rounded to two decimal places.)

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 $13.00 per bag. The following information is available about these bags: > Demand 70 bags/week > Order cost $58.00/order > Annual holding cost 30 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 70 bags is incorrect and actual demand averages only 45 bags per week. How much higher will total costs be, owing to the distorted EOQ caused by this forecast error? The costs will be $ higher owing to the error in EOQ. (Enter your response rounded to two decimal places.)

a. The average aggregate inventory value of the product if Ruby-Star used vendor 1 exclusively is $enter your response here. (Enter your response as a whole number.) b. The aggregate inventory value of the product if Ruby-Star used vendor 2 exclusively is shown below. c. How would your analysis change if average weekly demand increased to 160 units per week? The aggregate inventory values are shown below.