One of your Taiwanese suppliers has bid on a new line of molded plastic parts that is currently being assembled at your plant. The supplier has bid $0.10 per part, given a forecast you provided of 200,000 parts in year 1; 300,000 in year 2; and 500,000 in year 3. Shipping and handling of parts from the supplier’s factory is estimated at $0.01 per unit. Additional inventory handling charges should amount to $0.005 per unit. Finally, administrative costs are estimated at $20 per month. Although your plant is able to continue producing the part, the plant would need to invest in another molding machine, which would cost $10,000. Direct materials can be purchased for $0.05 per unit. Direct labor is estimated at $0.03 per unit plus a 50 percent surcharge for benefits; indirect labor is estimated at $0.011 per unit plus 50 percent benefits. Up-front engineering and design costs will amount to $30,000. Finally, management has insisted that overhead be allocated if the parts are made in-house at a rate of 100 percent of direct labor cost. The firm uses a cost of capital of 15 percent per year. What should you do, continue to produce in-house or accept the bid from your Taiwanese supplier? (Answer in Appendix D)
> What do we mean when we say that MRP is based on dependent demand?
> You are a newsvendor selling the San Pedro Times every morning. Before you get to work, you go to the printer and buy the day’s paper for $0.25 a copy. You sell a copy of the San Pedro Times for $1.00. Daily demand is distributed normally with mean = 250
> Which current issue in OSCM relates to the ability of a firm to maintain balance in a system, considering the ongoing economic, employee, and environmental viability of the firm?
> What are some reasons project scheduling is not done well?
> Sally’s Silk Screening produces specialty T-shirts that are primarily sold at special events. She is trying to decide how many to produce for an upcoming event. During the event, Sally can sell T-shirts for $20 apiece. However, when the
> When making decisions about what product(s) to produce in a manufacturing system, why is it not enough to simply consider the selling price and demand for different items?
> DAT, Inc., produces digital audiotapes to be used in the consumer audio division. DAT lacks sufficient personnel in its inventory supply section to closely control each item stocked, so it has asked you to determine an ABC classification. Here is a sampl
> Discuss the assumptions that are inherent in production setup cost, ordering cost, and carrying cost. How valid are they?
> Compared to manufacturing systems, what is it about the environment of service operations that make them much harder to control?
> Alpha Products, Inc., is having a problem trying to control inventory. There is insufficient time to devote to all its items equally. The following is a sample of some items stocked, along with the annual usage of each item expressed in dollar volume.
> What concept provides guidance and direction for consistent, efficient implementation of BPR projects?
> In the past, Taylor Industries has used a fixed–time period inventory system that involved taking a complete inventory count of all items each month. However, increasing labor costs are forcing Taylor Industries to examine alternative w
> A builder has located a piece of property that she would like to buy and eventually build on. The land is currently zoned for four homes per acre, but she is planning to request new zoning. What she builds depends on approval of zoning requests and your
> The American College of Surgeons has developed criteria for determining operating room standards in the United States. Level I and II trauma centers are required to have in-house operating room (OR) staff 24 hours per day. So a base level of a single OR
> CU, Incorporated (CUI), produces copper contacts that it uses in switches and relays. CUI needs to determine the order quantity, Q, to meet the annual demand at the lowest cost. The price of copper depends on the quantity ordered. Here are price-break an
> A particular raw material is available to a company at three different prices, depending on the size of the order: The cost to place an order is $40. Annual demand is 3,000 units. The holding (or carrying) cost is 25 percent of the material price. What
> Demand for a book at Amazon.com is 250 units per week. The product is supplied to the retailer from a factory. The factory pays $10 per unit, while the total cost of a shipment from the factory to the retailer when the shipment size is Q is given by S
> What are operations people’s primary complaints against the accounting procedures used in most firms? Explain how such procedures can cause poor decisions for the total company.
> SY Manufacturers (SYM) is producing T-shirts in three colors: red, blue, and white. The monthly demand for each color is 3,000 units. Each shirt requires 0.5 pound of raw cotton that is imported from Luft-Geshfet-Textile (LGT) Company in Brazil. The purc
> Annual demand for a product is 13,000 units; weekly demand is 250 units with a standard deviation of 40 units. The cost of placing an order is $100, and the time from ordering to receipt is four weeks. The annual inventory carrying cost is $0.65 per unit
> Some suggest that customer expectation is the key to service success. Give an example from your own experience to support or refute this assertion.
> Under which conditions would a plant manager elect to use a fixed-order quantity model as opposed to a fixed-time period model? What are the disadvantages of using a fixed-time period ordering system?
> Given the following information, formulate an inventory management system. The item is demanded 50 weeks a year. a. State the order quantity and reorder point. b. Determine the annual holding and order costs. c. If a price break of $50 per order was of
> Is the business reengineering process more gradual, more radical, or about the same as the TQM process?
> Gentle Ben’s Bar and Restaurant uses 5,000 quart bottles of an imported wine each year. The effervescent wine costs $3 per bottle and is served only in whole bottles because it loses its bubbles quickly. Ben figures that it costs $10 each time an order i
> What dashboard would display metrics such as accurate performance of transfusion protocols and code response time?
> What is used to indicate suggested changes in a process that may lead to improvements in a value stream?
> Famous Albert prides himself on being the Cookie King of the West. Small, freshly baked cookies are the specialty of his shop. Famous Albert has asked for help to determine the number of cookies he should make each day. From an analysis of past demand, h
> Wholemark is an Internet order business that sells one popular New Year’s greeting card once a year. The cost of the paper on which the card is printed is $0.05 per card, and the cost of printing is $0.15 per card. The company receives $2.15 per ca
> Recent figures show that almost 60% of the volume of freight movements in the United States ship by truck. Rail is far more fuel efficient on a ton-mile basis – CSX advertises they can move a ton of freight 468 miles on a gallon of fuel.* Why is it th
> Solve the newsperson problem. What is the optimal order quantity? Purchase cost c = 15 Selling price p = 25 Salvage value v = 10 Probability 0.2 0.1 0.1 0.2 0.3 0.1 Value 1 2 3 4 6.
> Next week, Super Discount Airlines has a flight from New York to Los Angeles that will be booked to capacity. The airline knows from past history that an average of 25 customers (with a standard deviation of 15) cancel their reservation or do not show fo
> Expando, Inc. is considering the possibility of building an additional factory that would produce a new addition to its product line. The company is currently considering two options. The first is a small facility that it could build at a cost of $6 mill
> You work for Nokia in its global cell phone group. You have been made project manager for the design of a new cell phone. Your supervisors have already scoped the project, so you have a list showing the work breakdown structure, and this includes major p
> The local supermarket buys lettuce each day to ensure really fresh produce. Each morning, any lettuce that is left from the previous day is sold to a dealer that resells it to farmers who use it to feed their animals. This week, the supermarket can buy f
> The R&D department is planning to bid on a large project for the development of a new communications system for commercial planes. The accompanying table shows the activities, times, and sequences required: a. Draw the network diagram. b. What is th
> To support the manufacture of desktop computers for their customers, Dell needs to order all the parts that go into the computer, such as hard drives, motherboards and memory modules. Obviously the demand for these items is driven by the production sche
> “The nice thing about inventory models is that you can pull one off the shelf and apply it so long as your cost estimates are accurate.” Comment.
> What tool is used to ensure that all tasks in a project has the right mix of project team members assigned to it?
> Describe the benefits of using an ERP system.
> Explain how an ERP system can improve the evaluation and analysis of performance metrics.
> From the standpoint of the scheduling process, how are resource limitations treated in an MRP application and how are they treated in a synchronous manufacturing application?
> Briefly describe how supply chain planning and control is managed in an ERP system.
> Are the ERP systems discussed in the chapter appropriate for use in all firms? Explain.
> Why is the cash-to-cash cycle time such an important supply chain performance measure?
> An assembly line makes two models of trucks: a Buster and a Duster. Busters take 12 minutes each and Dusters take 8 minutes each. The daily output requirement is 24 of each per day. Develop a perfectly balanced mixed-model sequence to satisfy demand.
> Operations and supply chain ___________________________ leverages the vast amount of data in enterprise resource planning systems to make decisions related to managing resources.
> What are the three types of projects based on the amount of change involved?
> Your company assembles five different models of a motor scooter that is sold in specialty stores in the United States. The company uses the same engine for all five models. You have been given the assignment of choosing a supplier for these engines for t
> U.S. Airfilter has hired you as a supply chain consultant. The company makes air filters for residential heating and air-conditioning systems. These filters are made in a single plant located in Louisville, Kentucky, in the United States. They are distri
> What tool is used to reflect the particular needs of each stakeholder group in a performance measurement system?
> Almost certainly you have seen vending machines being serviced on your campus and elsewhere. On a predetermined schedule the vending company checks each machine and fills it up with various products. Which category of inventory model is this an exampl
> Dunstreet’s Department Store would like to develop an inventory ordering policy with a 95 percent probability of not stocking out. To illustrate your recommended procedure, use as an example the ordering policy for white percale sheets. Demand for white
> Schedule the following activities using CPM: a. Draw the network path. b. What is the critical path? c. How many weeks will it take to complete the project? d. Which activities have slack, and how much? АСTIVITY IMMEDIATE PREDECESSOR TIME (WEEKS) A
> The McDonald’s fast-food restaurant on campus sells an average of 4,000 quarter-pound hamburgers each week. Hamburger patties are resupplied twice a week, and on average the store has 350 pounds of hamburger in stock. Assume that the hamburger patties co
> The owner of a large machine shop has just finished its financial analysis from the prior fiscal year. Following is an excerpt from the final report: a. Compute the inventory turnover ratio (ITR). b. Compute the weeks of supply (WS). Net revenue $37
> Discuss the concept of “drum-buffer-rope.”
> What do you call the average total value of all items held in inventory for a firm, at cost?
> Which supply chain efficiency measure is more appropriate when the majority of inventory is held in distribution channels?
> What is the term used for the act of moving some of a company’s internal activities and decision-making processes to outside providers?
> One product that Staples sells a lot of is copy paper. According to Lee’s Uncertainty Framework, what supply chain strategy is appropriate for this product?
> The Dorton University president has asked the OSCM department to assign eight biology professors (A, B, C, D, E, F, G, and H) to eight offices (numbered 1 to 8 in the diagram) in the new biology building. The following distances and two-way flows are g
> Sony Electronics produces a wide variety of electronic products for the consumer marketplace, like laptop computers, PlayStation game consoles and tablet computers. What type of products would these be considered in Lee’s Uncertainty Framework?
> What type of plant tour is designed to determine the “leanness” of a plant in just 30 minutes?
> A manufacturing shop is designed to operate most efficiently at an output of 550 units per day. In the past month the plant produced 490 units. What was their capacity utilization rate last month?
> AlwaysRain Irrigation, Inc., would like to determine capacity requirements for the next four years. Currently two production lines are in place for making bronze and plastic sprinklers. Three types of sprinklers are available in both bronze and plastic:
> What type of chart compares the current project schedule with the original baseline schedule so that deviations from the original plan can be easily noticed?
> As a manager, which learning percentage would you prefer (other things being equal), 110 percent or 60 percent? Explain.
> List some occupations or sporting events where the ending is a dominant element in evaluating success.
> Sometimes a company may need to purchase goods or services that are unique, very complex, and/or extremely expensive. These would not be routine purchases, but there may be a number of vendors that could supply what is needed. What process would be use
> Measures of product development success can be organized in what three categories?
> What term refers to the development and management of supplier relationships to acquire goods and services in a way that helps achieve the immediate needs of a business?
> Which category of lifetime product costs is sometimes overemphasized, leading to a failure to fully recognize the total cost of ownership?
> What three main categories of costs are considered in figuring total cost of ownership?
> What term refers to the way some companies focus on what they do best and outsource other functions to key partners?
> Many bottled water manufacturers have recently worked with their suppliers to switch over to bottles using much less plastic than before, reducing the amount of plastic that needs to be transported, recycled, and/or disposed of. What sourcing practice i
> What is the term used for a company moving management of the complete cycle of material flow to an outside provider?
> “Project control should always focus on the critical path.” Comment.
> Two of the efficiency ratios mentioned in the chapter are the receivable turnover ratio and the inventory turnover ratio. While they are two completely separate measures, they are very similar in one way. What is the common thread between these two?
> W. W. Grainger, Inc., is a leading supplier of maintenance, repair, and operating (MRO) products to businesses and institutions in the United States, Canada, and Mexico, with an expanding presence in Japan, India, China, and Panama. The company works wit
> What are the three primary data sources used by the MRP system?
> What motivations typically cause firms to initiate a facilities location or relocation project?
> A firm uses a serial assembly system and needs answers to the following: a. An output of 900 units per shift (7.5 hours) is desired for a new processing system. The system requires product to pass through four stations where the work content at each stat
> A study-aid desk staffed by a graduate student has been established to answer students’ questions and help in working problems in your OSCM course. The desk is staffed eight hours per day. The dean wants to know how the facility is working. Statistics sh
> What kind of layout is used in a physical fitness center?
> Here is a CPM network with activity times in weeks: a. Determine the critical path. b. How many weeks will the project take to complete? c. Suppose F could be shortened by two weeks and B by one week. How would this affect the completion date? (B(5
> An office employs several clerks who create documents and has one operator who enters the document information in a computer system. The group creates documents at a rate of 25 per hour. The operator can enter the information with an average exponentiall
> Customers enter the camera department of a store at the average rate of six per hour. The department is staffed by one employee, who takes an average of six minutes to serve each arrival. Assume this is a simple Poisson arrival, exponentially distributed
> Dave’s Auto Supply custom mixes paint for its customers. The shop performs a weekly inventory count of the main colors used for mixing paint. Determine the amount of white paint that should be ordered using the following information:
> Benny the Barber owns a one-chair shop. At barber college, they told Benny that his customers would exhibit a Poisson arrival distribution and that he would provide an exponential service distribution. His market survey data indicate that customers arriv
> A graphics reproduction firm has four units of equipment that are automatic but occasionally become inoperative because of the need for supplies, maintenance, or repair. Each unit requires service roughly twice each hour, or, more precisely, each unit of
> L Winston Martin (an allergist) has an excellent system for handling his regular patients who come in just for allergy injections. Patients arrive for an injection and fill out a name slip, which is then placed in an open slot that passes into another ro
> What it the major cost trade-off that must be made in managing waiting line situations?
> How much time on average would a server need to spend on a customer to achieve a service rate of 20 customers per hour?
> If the average time between customer arrivals is 8 minutes, what is the hourly arrival rate?
> Rent’R Cars is a multisite car rental company in the city. It is trying out a new “return the car to the location most convenient for you” policy to improve customer service. But this means that the c
> The exponential distribution is often used to model what in a queuing system?
> A local fast-food restaurant wants to analyze its drive-thru window. At this time, the only information known is the average number of customers in the system (4.00) and the average time a customer spends at the restaurant (1.176 minutes). What are the a
> What is the essential requirement for mixed-model lines to be practical?
> A toll tunnel has decided to experiment with the use of a debit card for the collection of tolls. Initially, only one lane will be used. Cars are estimated to arrive at this experimental lane at the rate of 750 per hour. It will take exactly four seconds
