Tim Urban, owner/manager of Urban’s Motor Court in Key West, is considering outsourcing the daily room cleanup for his motel to Duffy’s Maid Service. Tim rents an average of 50 rooms for each of 365 nights (365 * 3 50 equals the total rooms rented for the year). Tim’s cost to clean a room is $12.50. The Duffy’s Maid Service quote is $18.50 per room plus a fixed cost of $25,000 for sundry items such as uniforms with the motel’s name. Tim’s annual fixed cost for space, equipment, and supplies is $61,000. Which is the preferred process for Tim, and why?
> Following the incident of a furnace fire in the semiconductor plant in Albuquerque, New Mexico, Wellington Company decided to change its single-sourcing strategy of major components to multi-sourcing. The top management of Wellington Company believes tha
> How would you go about attempting to come up with the probability of a “super-event” or the probability of a “uniqueevent?” What factors would you consider?
> Use the data in Solved Problem 5.1 to examine what happens to the decision if Sarah King can increase all of Design B yields from 59,000 to 64,000 by applying an expensive phosphorus to the screen at an added manufacturing cost of $250,000. Prepare the m
> Sox Engineering designs and constructs air conditioning and heating systems for hospitals and clinics. Currently, the company’s staff is overloaded with design work. There is a major design project due in 8 weeks. The penalty for comple
> Ritz Products’s materials manager, Tej Dhakar, must determine whether to make or buy a new semiconductor for the wrist TV that the firm is about to produce. One million units are expected to be produced over the life cycle. If the product is made, start-
> Zhong Factory manufactures different types of computer motherboards in batches. The demand for one of its motherboards is 200 units/day, while Zhong has a capacity of up to 1,000 motherboards/day. The factory operates 250 days per year. The setup cost is
> Residents of Mill River have fond memories of ice skating at a local park. An artist has captured the experience in a drawing and is hoping to reproduce it and sell framed copies to current and former residents. He thinks that if the market is good he ca
> Portland Savings and Loan is considering new computer software, which, because of installation and training cost, will have an unusual pattern of net receipts. The expected receipts are: $20,000 in year 1, nothing in the next year, $30,000 in year 3, and
> Cheryl Druehl needs to purchase a new milling machine. She is considering two different competing machines. Milling Machine A will cost $300,000 and will return $80,000 per year for 6 years, with no salvage value. Milling machine B will cost $220,000 and
> Given the contribution made on each of the three products in the following table and their position in the life cycle, identify a reasonable operations strategy for each:
> MacDonald Products, Inc., of Clarkson, New York, has the option of (a) proceeding immediately with production of a new top-of-the-line stereo TV that has just completed prototype testing or (b) having the value analysis team complete a study. If Ed Lus
> The product design group of Iyengar Electric Supplies, Inc., has determined that it needs to design a new series of switches. It must decide on one of three design strategies. The market forecast is for 200,000 units. The better and more sophisticated th
> Prepare a bill of material for a mechanical pencil.
> Prepare a bill of material for a computer mouse (GeniMouse).
> Prepare a bill of material for the table illustrated:
> Prepare a bill of material for a wooden pencil, complete with eraser.
> Al-Tawheed Discount Store sells a certain type of office chair for E£400. The annual holding cost is E£40 per unit per year, annual demand is 900 chairs, and the order cost is E£800 per order. The lead time is 14 days. The store is open 360 days per year
> Prepare a bill of material and an assembly chart for a salad of your own choosing.
> Develop the BOM for product XYZ made from two units of B, five units of C, and four units of D. B is subassembled from six units of E and two units of F; C from four units of E and three units of D, and D from two units of G and four units of H.
> Prepare a script for telephone callers at the university’s annual “phone-a-thon” fundraiser.
> Draw an assembly chart for a pair of eyeglasses and its case.
> Prepare a product-by-value analysis for the following products, and given the position in its life cycle, identify the issues likely to confront the operations manager and his or her possible actions. Product Alpha has annual sales of 1,000 units and a c
> The table below shows the activities, immediate predecessors, and activity durations of a project. Draw the AON project network. How long would it take to complete this project? What is the length of the critical path?
> Using the project information listed in the table below: a) Draw the AON network for the construction activity. b) Draw the AOA for the construction activity.
> The food items listed in the following table are stored on a cruise ship for a 7-day cruise. Using the following figure, indicate the best storage location for each item to minimize average distance traveled.
> Amy Zeng, owner of Zeng’s Restaurant Distributions, supplies nonperishable goods to restaurants around the metro area. She stores all the goods in a storage area with a single dock and one aisle. The goods are divided into five categori
> Peter Bell of Bell Electronics maintains an extensive stock of computer components for the consumer market. He has hundreds of drawers/cabinets for the many small parts (mother boards, graphic cards, fans, etc.), and he wants to organize them so as to mi
> Metters Cabinets, Inc., needs to choose a production method for its new office shelf, the Maxistand. To help accomplish this, the firm has gathered the following production cost data: Metters Cabinets projects an annual demand of 24,000 units for the Max
> Nubia textile shop in Egypt imports one of its products from China. The transportation time is currently 40 days, the cost per unit is E£35, and the holding cost of the product is 30% annually. Because of the long shipping time, the manager is evaluating
> The Smoked Salmon, a seafood supplier in Egypt, has a new yearly contract to supply fresh seafood products to Saudi Arabia. The value of the contract is E£800,000 (Egyptian Pound) and the estimated holding cost is 20% annually. The Smoked Salmon is evalu
> If you have a third option for the data in Problem S11.16 and it costs only $4,000 and also takes 20 days, what is your most economical plan?
> A company with a plant in Basel can be served by both rail and truck at a cost of €250 and €1,500 per load, respectively. The transit time for the train is 15 days while that for the truck is 5 days. a) If the daily cost of transit inventory is €100, whi
> You are considering opening a copy service in the student union. You estimate your fixed cost at $15,000 and the variable cost of each copy sold at $.01. You expect the selling price to average $.05. a) What is the break-even point in dollars? b) What is
> Given the following data, calculate a) BEPx; b) BEP$; and c) the profit at 100,000 units: P = $8/unit V = $4/unit F = $50,000
> Janelle Heinke, the owner of Ha’Peppas!, is considering a new oven in which to bake the firm’s signature dish, vegetarian pizza. Oven type A can handle 20 pizzas an hour. The fixed costs associated with oven A are $20,
> Given the data in Problem S7.17, at what volume (units) of output would the two alternatives yield the same profit?
> Using the data in Problem S7.17: a) What is the break-even point in dollars for proposal A if you add $10,000 installation to the fixed cost? b) What is the break-even point in dollars for proposal B if you add $10,000 installation to the fixed cost?
> Sroufe Manufacturing intends to increase capacity by overcoming a bottleneck operation by adding new equipment. Two vendors have presented proposals. The fixed costs for proposal A are $50,000, and for proposal B, $70,000. The variable cost for A is $12.
> Matthew Bailey, as manager of Designs by Bailey, is upgrading his CAD software. The high-performance (HP) software rents for $3,000 per month per workstation. The standard-performance (SP) software rents for $2,000 per month per workstation. The producti
> Smithson Cutting is opening a new line of scissors for supermarket distribution. It estimates its fixed cost to be $500.00 and its variable cost to be $0.50 per unit. Selling price is expected to average $0.75 per unit. a) What is Smithson’s break-even p
> When is the application of a multi-domestic strategy most appropriate? What kind of industries can this be applied to?
> Sean Willems has evaluated the vendors in Table S11.3 as well as Fricker V-Tech, the vendor in Problem S11.13, but the Quality Control Manager says that new data suggest that Siemsen Systems, Inc.’s quality has deteriorated, and Siemsen should now score
> Referring to Problem S11.12, Sean Willems, in addition to the two possible vendors evaluated in Table S11.3,has found a third possible vendor. He now wants to evaluate all three vendors using the weights in Table S11.3. He scores the third vendor, Fricke
> The supply chain manager for Keskin Industries, Sean Willems, has developed the data shown in Table S11.3 for two vendors. Based on the weights and rankings shown, which is the preferred vendor?
> Using the data in Problem S11.10, assume that both Donna, Inc. and Kay Corp. are able to move all their “poor” ratings to “fair.” How would you then rank the two firms?
> As purchasing agent for Eynan Enterprises in Richmond, Virginia, you ask your buyer to provide you with a ranking of “excellent,” “good,” “fair,”
> Consider a three-firm supply chain consisting of a retailer, manufacturer, and supplier. The retailer’s demand over an 8-week period was 100 units each of the first 2 weeks, 200 units each of the second 2 weeks, 300 units each of the th
> A manufacturer produces a single product that is sold abroad to an industrial company through the following channel. a) Calculate the bullwhip effect for each stage of the supply chain. b) What kind of actions can the management take to smooth the bullwh
> Over the past 5 weeks, demand for wine at Winston’s Winery has averaged 1,890 bottles, and the variance of demand has been 793,000 bottles. Winston has ordered an average of 1,900 bottles per week over that time period, with a variance of orders of 1,805
> Consider the supply chain illustrated here: Last year, the retailer’s weekly variance of demand was 200 units. The variance of orders was 500, 600, 750, and 1,350 units for the retailer, wholesaler, distributor, and manufacturer, respec
> Kryoneri Perfume Company is considering two alternatives for the supply of vetiver oil (an essential oil used in high-end perfumes). Alternative 1 is to use two suppliers located in Haiti, where half of the world’s vetiver oil comes from. Each has a “uni
> Johnson Chemicals is considering two options for its supplier portfolio. Option 1 uses two local suppliers. Each has a “unique-event” risk of 5%, and the probability of a “superevent” that would disable both at the same time is estimated to be 1.5%. Opti
> Phantom Controls monitors and repairs control circuit boxes on elevators installed in multistory buildings in downtown Chicago. The company has the contract for 108 buildings. When a box malfunctions, Phantom installs a new one and rebuilds the failed un
> A warehouse manager at Mary Beth Marrs Corp. needs to simulate the demand placed on a product that does not fit standard models. The concept being measured is “demand during lead time,” where both lead time and daily d
> Susan Sherer’s grocery store has noted the following figures with regard to the number of people who arrive at the store’s three checkout stands and the time it takes to check them out: Simulate the utilization of the
> Arnold Palmer Hospital is studying the number of emergency surgery kits that it uses on weekends. Over the past 40 weekends, the number of kits used was as follows: The following random numbers have been generated: 11, 52, 59, 22, 03, 03, 50, 86, 85, 15,
> Barbara Flynn sells papers at a newspaper stand for $.35. The papers cost her $.25, giving her a $.10 profit on each one she sells. From past experience Barbara knows that: a) 20% of the time she sells 100 papers. b) 20% of the time she sells 150 papers.
> The time between incoming calls to a help desk can be seen as a Poisson distributed random variable with an average of three minutes, and the duration can be seen as a discrete random variable. The following tables show a cumulative distribution of incom
> Repeat the simulation in Problem F.20, assuming that the reorder point is 4 units rather than 2. Compare the costs for these two situations. Use the same random numbers as in Problem F.20.
> California Gardens, Inc., prewashes, shreds, and distributes a variety of salad mixes in 2-pound bags. Doug Voss, Operations VP, is considering a new Hi-Speed shredder to replace the old machine, referred to in the shop as “Clunker.” Hi-Speed will have a
> The number of machine breakdowns per day at Yuwen Chen’s factory is 0, 1, or 2, with probabilities 0.5, 0.3, or 0.2, respectively. The following random numbers have been generated: 13, 14, 02, 18, 31, 19, 32, 85, 31, and 94. Use these numbers to generate
> A nail salon is deciding if appointing an additional manicurist will be financially feasible. Today, the nail salon has three manicurists, only one of whom is by appointment and the other two for drop-in sessions. The following tables summarize the vario
> Central Hospital in York, Pennsylvania, has an emergency room that is divided into six departments: (1) an initial exam station to treat minor problems or to make a diagnosis; (2) an X-ray department; (3) an operating room; (4) a cast-fitting room; (
> The time between arrivals at the drive-through window of Barry Harmon’s fast-food restaurant follows the distribution given in the table. The service-time distribution is also given. Use the random numbers provided to simulate the activ
> Woodworth Property Management is responsible for the maintenance, rental, and day-to-day operation of a large apartment complex in El Paso. Bruce Woodworth is especially concerned about the cost projections for replacing air conditioner compressors. He w
> The number of cars arriving at Mark Coffin’s selfservice gasoline station during the last 50 hours of operation are as follows: The following random numbers have been generated: 44, 30, 26, 09, 49, 13, 33, 89, 13, and 37. Simulate 10 ho
> Adventure Rafting runs rafts on the Colorado River. It has eight rafts in its inventory. The demand for rafts during the busy months of June and July has been either 4, 5, 6, 7 or 8, with probabilities of 0.1, 0.3, 0.3, 0.2, or 0.1, respectively. Use Tab
> Refer to the data in Solved Problem F.1, on page 837, which deals with Higgins Plumbing and Heating. Higgins has now collected 100 weeks of data and finds the following distribution for sales: a) Assuming that Higgins maintains a constant supply of 8 hea
> Leonard Presby’s newsstand uses naive forecasting to order tomorrow’s papers. The number of newspapers ordered corresponds to the previous day’s demands. Today’s demand for papers wa
> The daily demand for tuna sandwiches at an Ohio University cafeteria vending machine is 8, 9, 10, or 11, with probabilities 0.4, 0.3, 0.2, or 0.1, respectively. Assume the following random numbers have been generated: 09, 55, 73, 67, 53, 59, 04, 23, 88,
> Develop a Pareto Chart of the following causes for defectives in Lloyds shoe production.
> McBurger, Inc., wants to redesign its kitchens to improve productivity and quality. Three designs, called designs K1, K2, and K3, are under consideration. No matter which design is used, daily production of sandwiches at a typical McBurger restaurant is
> The financial statements of a debt service fund may reveal less information than is apparent. The balance sheet and a comparative statement (budgetto-actual) of revenues, expenditures, and changes in fund balance of Parkville's general obligation debt se
> Accounting practices for interest expenditures may neither reflect actual economic costs nor mirror those for interest revenues. A town plans to borrow about $10 million and is considering three alternatives. A town official requests your guidance on the
> Can a government sell assets to itself to generate revenue? A city is having fiscal problems in 20Xl. It expects to report a deficit in its general fund, the only fund that is statutorily required to be balanced. To eliminate the anticipated deficit the
> The following is an excerpt from a note to the financial statements of an actual major city. The city accounts for inventories on the consumption basis. One of the city's departments, which is accounted for in the general fund, budgeted $199,000 in suppl
> Inventory transactions can be derived from year-end balances. All the amounts shown relate only to supplies. All purchases during the year were paid in cash. Assume that the city uses the consumption method to account for supplies. a. Reconstruct all jou
> One-shots" have a greater impact on cash-based budgets than on accrual-based financial statements. A city recently proposed the following "one-shot" measures to help balance its 20Xl general fund budget (the only budget that is required by law to be bala
> The tax code can be used as a way to avoid reporting expenditures. To encourage both economic development and environmental sustainability, State No. 1 has offered grants of up to $10 million to any company in its jurisdiction that invests in equipment u
> The reporting of on-behalf payments may have political consequences. In 20Xl, the Bakersville Independent School District incurred $12 million in expenditures for teachers' salary and benefits. In that year, the legislature of the state in which the dist
> Did the city face any natural disaster that caused an impairment to its capital assets? How was that reported and accounted for?
> In some types of transactions, assets are recognized concurrently with revenues; in others they are not. In October 20Xl, the Village of Mason levied $80 million of property taxes for its 20X2 fiscal year (which is the same as the calendar year). The tax
> Policy changes and other measures will have varying effects on reported revenues. The board of trustees of an independent school district is contemplating several policy changes and other measures, all of which it intends to implement within the fiscal y
> A state government provided several grants to school districts and local governments during its fiscal year ending August 31. 1. On August 1, 20Xl, it announced a $2 million grant to a local school district for the purchase of computers. The district can
> Different types of funds justify different practices as to budgets and commitments. Review the budget note to Smith City's financial statements presented in the previous problem. Assume that the city engaged in the following transactions in 20X0 and 20Xl
> Transactions may have significantly different impacts on a government's budget, governmental funds statements, and government-wide statements. A school district prepares its budget on a cash basis. It is contemplating the changes or actions that follow.
> A change to the full accrual basis may have little impact upon reported revenues. A city levies property taxes of $4 billion in June 20Xl for its fiscal year beginning July 1, 20Xl. The taxes are due by January 31, 20X2. The following (in millions) indic
> The "60-day rule" may not be applicable to all types of revenues. Manor County was awarded a state grant to establish evening athletic programs for at-risk youth. The $3.6 million award, to cover the calendar year 20X2, was announced on November 15, 20Xl
> Nonexchange revenues can be of four types. The GASB has identified four classes of nonexchange revenues: • Derived tax • Imposed • Government mandated • Voluntary For each of the following revenue transactions affecting a city, identify the class in whic
> Do conventional financial statements satisfy the objectives of financial reporting? The financial statements that follow were adapted from those of the University of Texarkana. 1. Based on the information included in the financial statements, respond as
> The recognition of revenue from fines does not necessarily reflect the amount "earned" by merely issuing tickets. In August 20Xl, the last month of its fiscal year, Goldwaithe Township issued $88,000 worth of tickets for parking and traffic violations. O
> The dual objectives of assessing inter period equity and ensuring budgetary compliance may necessitate different accounting practices. A city engages in the transactions that follow. For each transaction, indicate the amount of revenue or expenditure tha
> In a particular year, the federal government was affected by the following transactions and events. For each, indicate the amount that it should recognize as an expense during that year. Cite the FASAB principle on which you rely. 1. The government order
> When should the costs of subsidized loan programs be recognized? In 20X0, Congress established a small business direct loan program. The program provides that qualifying businesses can obtain loans at a rate 5 percent below that prevailing on Treasury se
> To help middle-income students finance the cost of their university educations, the Student Loan Authority guarantees student loans made by private banks. By guaranteeing the loans, the agency enables the banks to make the loans at rates far lower than t
> A federal environmental agency engaged in the following transactions during a particular year. 1. It billed corporations for which it provided services $160 million. Of this, it collected $140 million. 2. It levied $150 million in fines and penalties aga
> The financial statements of the Department of Veterans Affairs (VA) contained the following excerpt from a note entitled "Veteran Benefits": Certain Veterans, who die or are disabled from military service-related causes as well as their dependents, recei
> Federal agency financial statements were not discussed in detail in this chapter. Nevertheless, despite some unusual terminology, they are readily understandable. Examine the following financial statements, which are condensed versions of those of a fede
> Review the Statement of Social Insurance, the related notes, and the discussion of social insurance that is reported as "required supplementary information" in the most recent Consolidated Financial Report of the federal government at large. 1. In terms
> Among the most contentious of federal accounting issues is how the Federal Reserve System should be accounted for in the Financial Report of the U.S. Government. 1. Review a recent balance sheet of the Federal Reserve System ("Federal Reserve Banks Combi
