You are in charge of designing a supply chain for furniture distribution. One of your products is a study desk. This desk comes in two colors: black and cherry. Weekly demand for each desk type is normal with mean 100 and standard deviation 65 (demands for the two colors are independent). The lead time from the assembly plant to the retail store is two weeks and you order inventory replenishments weekly. There is no finished goods inventory at the plant (desks are assembled to order for delivery to the store). a. What is the expected on-hand inventory of desks at the store (black and cherry together) if you maintain a 97 percent in-stock probability for each desk color? [17.3] You notice that only the top part of the desk is black or cherry; the remainder (base) is made of the standard gray metal. Hence, you suggest that the store stock black and cherry tops separately from gray bases and assemble them when demand occurs. The replenishment lead time for components is still two weeks. Furthermore, you still choose an order- up-to level for each top to generate a 97 percent in-stock probability. b. What is the expected on-hand inventory of black tops? [17.3] c. How much less inventory of gray bases do you have on average at the store with the new in-store assembly scheme relative to the original system in which desks are delivered fully assembled? (Hint: Remember that each assembled desk requires one top and one base.) [17.3]
> Why are bond ratings of vital concern to bond issuers?
> What distinguishes moral obligation bonds from other types of debt? Why would one government assume a moral obligation for another government's bonds?
> Which of the following would be least likely to be classified as a city's general capital assets? a. Roads and bridges b. Electric utility lines c. Computers used by the police department d. Computers used by the department that collects the city's sale
> What special problems do governments face in measuring the income taxes associated with a particular year?
> What are the key distinguishing characteristics of fiduciary funds?
> What is meant by "combining statements"?
> Why may it be unclear whether a particular organization associated with the federal government should be considered a federal reporting entity? What are the key criteria as to whether an entity should be included in the Consolidated Financial Report (CPR
> What is meant by the unified budget? Why are Social Security receipts and disbursements said to be "off budget?"
> You are the auditor of a state. The state made a $10 million grant to a city. The grant reimburses the city for allowable costs incurred in hosting a meeting of international leaders. The meeting was held two weeks prior to the end of the state's fiscal
> According to the GASB, "Financial statements for governmental funds should be presented using the current financial resources measurement focus and the modified accrual basis of accounting." Financial resources are conventionally defined as "cash, invest
> The city of Carlasville imposes a one percent sales tax in addition to that levied by the state. The state, however, collects the tax on behalf of the city. The state typically does not notify the city of the amount of taxes collected in the fourth quart
> A separate column to report the variance between the final budget and actual amounts is encouraged but not required. Governments may also report the variance between original and final budget amounts. The implication is clear. The variance between the fi
> Central School District is awarded a $400,000 federal grant to implement and test a new way of teaching middle school math. The award stipulates that the district must provide a 20 percent match. a. In what fund-type ( e.g., general, special revenue, cap
> Did the government receive any funding for SNAP or any other Federal programs? Explain with details.
> Generally accepted accounting principles require governments to include in their annual reports a comparison of actual results with the budget for each governmental fund for which an annual budget has been adopted. This information is generally presented
> To encourage a private health care company to construct a nursing home, a city agrees to issue tax exempt bonds for the benefit of the company. The bonds will fund the construction of the facility. The city will hold title to the home for a period of 30
> A city enters into an 11 month lease with an option to renew the lease for additional 11 months up to 5 times. In your opinion does the lease qualify for the one-year exception and thereby be accounted for as an operating rather than a capital lease? Wou
> Per the GASB, training costs should be expensed as incurred for both internally generated computer software and subscription-based technology arrangements (SBITAs). They should not be capitalized as part of either the resultant computer software or the s
> As discussed in Chapter 4, governments must mark-tomarket their investments (including held-to-maturity debt securities). Suppose that a city has in its portfolio debt securities that it intends to hold to maturity. Interest rates increase. Therefore the
> As indicated in the chapter, the GASE takes a different position with respect to capitalization of interest during periods of construction than does the FASB. Inasmuch as there appears to be little difference in the nature of the transactions, especially
> The "In Practice" on page 261 notes that tax-exempt advance refundings involving debt redemptions are no longer allowed under U.S. tax law and that, as a result, the cost of debt issuance may go up for state and local governments. How might states and ci
> For each of the following indicate the amount of revenue that Beanville should recognize in its 20X2 (1) governmentwide statements and (2) governmental fund statements. Provide a brief justification or explanation for your responses. 1. The state in wh
> The general principles of revenue recognition are the same for both governmental and government-wide statements. For each of the following situations, indicate the amount of revenue that the government should recognize in an appropriate governmental fund
> For each of the following, indicate the fund, if any in which the government would account for the resources described. If a fiduciary, rather than a governmental fund, indicate the type of fund. Briefly justify your response. 1. A government contributes
> Were there any tax abatements disclosed for the year? If so, provide a brief description and the gross amount of taxes that were reduced during the reporting period.
> A state government, enters into an arrangement in which it will transfer to the Western Tollway Corporation (WTC) a recently constructed highway. The state reports the highway on its financial statements at its cost of $2 billion. Upon transfer, the stat
> A city entered into a contract with World Wide Construction Company (WWCC) to design, construct and operate a tunnel for a period of 30 years. Once the tunnel was completed, WWCC had complete responsibility for all aspects of tunnel operations, including
> Decommissioning costs are often nontrivial and must be recognized years in advance. A city constructed a power plant at a cost of $600 million. The facility has an estimated useful life of 50 years. At the end of the year in which the plant went on-line,
> Landfill costs must be reported as expenses during the periods of use-but only in enterprise funds. In 2X21, a city opens a municipal landfill, which it will account for in an enterprise fund. It estimates capacity to be 6 million cubic feet and usable l
> A lessor must report on its balance sheet both a receivable and the underlying asset. Bean County recently acquired a commercial office building at a cost $20 million, paid in cash. It estimates that the economic life of the building is 40 years (with no
> Overlapping debt can significantly alter key measures of debt capacity. The following information was taken from the City of Wyoming, Michigan's, schedule of direct and overlapping debt. 1. What is the most likely way the applicable percentages were deri
> A government hospital entered into a licensing agreement with a commercial software company that would permit it to use the firm's patient billing program and related data storage facilities for a period of five years. The following information relates t
> BANs, TANs, and RANs may sound alike, but they are not necessarily accounted for in the same way. In August 20X0, voters of Balcones, a medium-sized city, approved a $15 million general obligation bond issue to finance the construction of recreational fa
> Demand bonds may provide the issuer with the disadvantages, but not the advantages, of long-term debt. On June l, 20Xl, a city issues $2 million in 7 percent demand bonds. Although the bonds have a term of 10 years , they contain a " put" option permitti
> This example provides an overview of transactions addressed in this and previous chapters. Zeff Township assessed property owners $1,000,000 to construct sidewalks. The assessments were payable over a period of 10 years in annual installments of $123,290
> Did the city enter into any SBITAs? What type and for how long?
> Key information as to long-term obligations may be found in a city's annual comprehensive financial report (ACFR) in sections other than the primary financial statements. This problem is based on information drawn from the ACFR of the City of Davis. 1. T
> Entries in both governmental funds and government-wide statements can be reconstructed from a city's schedule of changes in long-term debt. The accompanying table was drawn from the City of Fort Leah's schedule of long-term liabilities (all amounts in th
> Government-wide statements are on a full accrual basis; fund statements are on a modified accrual basis. The East Eanes School District engaged in or was affected by the following events and transactions during its fiscal year ending June 30, 20Xl. 1. Te
> If governments don't preserve their infrastructure assets, they must depreciate them . In 20XO , Bantham County incurred $80 million in costs to construct a new highway. Engineers estimate that the useful life of the highway is 20 years . 1. Prepare the
> Favorable revenue-to-expenditure ratios may not always be as favorable as they appear. In the management discussion and analysis accompanying its 20XS financial statements, Tiber County reported that "for the fifth consecutive year revenues exceeded expe
> Charter City issued $100 million of 6 percent, 20-year general obligation bonds on January 1, 20Xl. The bonds were sold to yield 6.2 percent and hence were issued at a discount of $2.27 million (i.e., at a price of $97.73 million). Interest on the bonds
> What is the City's credit rating with the different Bond rating agencies?
> Assume that Nolanville's fiscal year ends on December 31. 1. Nolanville's payroll for one of its departments is $15,000 per week. It pays its employees on the Thursday of the week following that in which the wages and salaries are earned. In 20Xl, Decemb
> One of O’Neill’s high-end wetsuits is called the Animal. Total demand for this wetsuit is normally distributed with a mean of 200 and a standard deviation of 130. In order to ensure an excellent fit, the Animal comes in 16 sizes. Furthermore, it comes in
> Consider the following excerpts from a New York Times article (Kaufman, 2000): Despite its early promise . . . Restoration has had trouble becoming a mass-market playerWhat went wrong? High on its own buzz, the company expanded at breakneck speed, more t
> Cyber Chemicals uses liquid nitrogen on a regular basis. Average daily demand is 178 gallons with a standard deviation of 45. Due to a substantial ordering cost, which is estimated to be $58 per order (no matter the quantity in the order), Cyber currentl
> ACold Inc. is a frozen food distributor with 10 warehouses across the country. Iven Tory, one of the warehouse managers, wants to make sure that the inventory policies used by the warehouse are minimizing inventory while still maintaining quick delivery
> Schmears Inc. is a catalog retailer of men’s shirts. Daily demand for a particular SKU (style and size) is Poisson with mean 1.5. It takes three days for a replenishment order to arrive from Schmears’ supplier and orders are placed daily. Schmears uses t
> Dr. Jack is in charge of the Springfield Hospital’s Blood Center. Blood is collected in the regional Blood Center 200 miles away and delivered to Springfield by air- plane. Dr. Jack reviews blood reserves and places orders every Monday morning for delive
> Shelf space in the grocery business is a valuable asset. Every good supermarket spends a significant amount of effort attempting to determine the optimal shelf space allocation across products. Many factors are relevant to this decision: the profitabilit
> Office Supply Company (OSC) has a spare parts warehouse in Alaska to support its office equipment maintenance needs. Once every six months, a major replenishment shipment is received. If the inventory of any given part runs out before the next replenishm
> Consider the relationship between TEC and O’Neill with unlimited, but expensive, reactive capacity. Recall that TEC is willing to give O’Neill a midseason replenishment (see Figure 15.1) but charges O’Neill a 20 percent premium above the regular wholesal
> The following table shows financial data (year 2004) for Costco Wholesale and Walmart, two major U.S. retailers. Assume that both companies have an average annual holding cost rate of 30 percent (i.e., it costs both retailers $3 to hold an item that they
> You are traveling abroad and have only American dollars with you. You are currently in the capital but you will soon be heading out to a small town for an extended stay. In the town, no one takes credit cards and they only accept the domes- tic currency
> Lucky Smokes currently operates a warehouse that serves the Virginia market. Some trucks arrive at the warehouse filled with goods to be stored in the ware- house. Other trucks arrive at the warehouse empty to be loaded with goods. Based on the number of
> Sarah is planning her wedding. She and her fianceˊ have signed a con- tract with a caterer that calls for them to tell the caterer the number of guests that will attend the reception a week before the actual event. This “fina
> CPG Bagels starts the day with a large production run of bagels. Through- out the morning, additional bagels are produced as needed. The last bake is completed at 3 p.m. and the store closes at 8 p.m. It costs approximately $0.20 in materials and labor t
> Geoff Gullo owns a small firm that manufactures “Gullo Sunglasses.” He has the opportunity to sell a particular seasonal model to Land’s End. Geoff offers Land’s End two purchasing options: ∙ Option 1. Geoff offers to set his price at $65 and agrees to c
> To ensure a full line of outdoor clothing and accessories, the marketing department at Teddy Bower insists that they also sell waterproof hunting boots. Unfortunately, neither Teddy Bower nor TeddySports has expertise in manufacturing those kinds of boot
> Teddy Bower is an outdoor clothing and accessories chain that purchases a line of parkas at $10 each from its Asian supplier, TeddySports. Unfortunately, at the time of order placement, demand is still uncertain. Teddy Bower forecasts that its demand is
> Weekday lunch demand for spicy black bean burritos at the Kiosk, a local snack bar, is approximately Poisson with a mean of 22. The Kiosk charges $4.00 for each burrito, which are all made before the lunch crowd arrives. Virtually all burrito customers a
> Four partners in a big consulting firm try to estimate the number of new recruits needed for the next year. Their forecasts are 32, 44, 21, and 51, respectively. What would be the result of a simple forecast combination? [13.6]
> GoPro is a training company that helps athletes applying for college improve their sports. Most colleges have their application deadline at the end of December, so the third and fourth quarters tend to be the busiest for the company. Based on the last th
> Mt. Kinley is a strategy consulting firm that divides its consult- ants into three classes: associates, managers, and partners. The firm has been stable in size for the last 20 years, ignoring growth opportunities in the 90s, but also not suffering from
> Online-MBA is an online university that allows students to get credit for various online courses they have taken, as long as they come to campus for a six-week intense boot camp. Demand for this program is quickly increasing. For the last six months, mon
> Tom’s Towing LLC operates a fleet of tow trucks that it sends to help drivers in need on the nearby highway. The numbers of calls requesting a tow truck for Monday, Tuesday, Wednesday, and Thursday were 27, 18, 21, and 15, respectively. What would be its
> Tom’s Towing LLC operates a fleet of tow trucks that it sends to help drivers in need on the nearby highway. The numbers of calls requesting a tow truck for Monday, Tuesday, Wednesday, and Thursday were 27, 18, 21, and 15, respectively. What would be its
> Tom’s Towing LLC operates a fleet of tow trucks that it sends to help drivers in need on the nearby highway. The numbers of calls requesting a tow truck for Monday, Tuesday, Wednesday, and Thursday were 27, 18, 21, and 15, respectively. What would be its
> Jim and John run a barber shop. Every night, both of them predict how many guests will come on the next day. Over the last four days, they have collected some data about their predictions and the actual outcome. Jim predicts the number of guests to be 56
> A small project consists of three activities: A, B, and C. To start activity C, both activities A and B need to be complete. Activity A takes 3 days with a probability of 50 percent and 5 days with a probability of 50 percent, and so does Activity B. Act
> Thierry, Ute, and Vishal are getting ready for their last period in the MBA program. Following the final exams, they intend to throw a big party with many of their friends from back home. Presently, they have identified the following set of activities th
> Consider the dependency matrix and the activity durations provided above. a. Build a project graph, visually depicting the evolution of this project. [12.2] b. Find the critical path. What is the earliest time that the project can be completed? [12.4] c.
> If the jobs displayed in Table 11.20 are processed using the earliest-due-date rule, a. What would be the lateness of job B? [11.4] b. What would be the tardiness of job E? [11.4] c. What is the maximum tardiness? [11.4] d. What is the average flow time?
> There are five planes ready for departure at an airport. The number of passengers on each plane is displayed in Table 11.18. Each plane requires 10 minutes to taxi to the runway and 2 minutes to take off (i.e., there needs to be 2 minutes between departu
> Strohrmann, a large-scale bakery in Pennsylvania, is laying out a new production process for their packaged bread, which they sell to several grocery chains. It takes 12 minutes to bake the bread. How large an oven is required so that the company is able
> Assume the jobs displayed in Table 11.17 need to be processed on a single resource and are sequenced with the WSPT rule. Which job would be processed third? [11.3]
> Given the projects displayed in Table 11.15, assume FCFS is used to sequence the jobs. a. What is the average flow rate of the projects (in projects per hour)? [11.2] b. What is the average flow time of the projects (in hours)? [11.2] c. What is the aver
> An architect has five projects to complete. She estimates that three of the projects will require one week to complete and the other two will require three weeks and four weeks. During the time these projects are completed (and assuming no other projects
> Gotham City Ambulance Services (GCAS) owns eight ambulances. On average, emergencies are reported to GCAS every 15 minutes (with a coefficient of variation of 1, no seasonality exists). If GCAS has available ambulances, it immediately dispatches one. If
> XTremely Fast Service Inc. is a call center with several business units. One of its business units, Fabulous 4, currently staffs four operators who work eight hours per day Monday through Friday. They provide customer support for a mail-order catalog com
> Suppose a process contains two workstations that operate with no buffer between them. Now consider the three possible scenarios below a. Which of the three scenarios will have, on average, the highest flow rate? b. Which of the three scenarios will have,
> Consider the situation of Mr. R. B. Cheney, who owns a large gas station on a highway in Vermont. In the afternoon hours, there are, on average, 1,000 cars per hour passing by the gas station, of which 2 percent would be willing to stop for refueling. Ho
> A small video store has nine copies of the DVD Captain Underpants, The Movie in its store. There are 15 customers every day who request this movie for their children. If the movie is not on the shelf, they leave and go to a competing store. Customers arr
> A friend of yours approaches you with the business idea of a private home security service. This private home security service guarantees to either dispatch one of their own five guards immediately if one of their customers sends in an alarm or, in the c
> Mango Electronics Inc. is a Fortune 500 company that develops and markets innovative consumer electronics products. The development process proceeds as follows. Mango researches new technologies to address unmet market needs. Patents are filed for produc
> While driving home for the holidays, you can’t seem to get Little’s Law out of your mind. You note that your average speed of travel is about 60 miles per hour. More- over, the traffic report from the WXPN traffic chopper states that there is an average
> A university offers a walking escort service to increase security around campus. The system consists of specially trained uniformed professional security officers that accompany students from one campus location to another. The service is operated 24 hou
> Webflux is an Internet-based DVD rental business specializing in hard- to-find, obscure films. Its operating model is as follows. When a customer finds a film on the Webflux website and decides to watch it, she puts it in the virtual shopping cart. If a
> RentAPhone is a new service company that provides European mobile phones to American visitors to Europe. The company currently has 80 phones available at Charles de Gaulle Airport in Paris. There are, on average, 25 customers per day requesting a phone.
> Atlantic Video, a small video rental store in Philadelphia, is open 24 hours a day, and—due to its proximity to a major business school—experiences customers arriving around the clock. A recent analysis done by the store manager indicates that there are
> The following situation refers to Tom Opim, a first-year MBA student. In order to pay the rent, Tom decides to take a job in the computer department of a local department store. His only responsibility is to answer telephone calls to the department, most
> The airport branch of a car rental company maintains a fleet of 50 SUVs. The interarrival time between requests for an SUV is 2.4 hours, on average, with a standard deviation of 2.4 hours. There is no indication of a systematic arrival pattern over the c
> My-law.com is a recent start-up trying to cater to customers in search of legal services who are intimidated by the idea of talking to a lawyer or simply too lazy to enter a law office. Unlike traditional law firms, My-law.com allows for extensive intera
> What is the relationship between the number of Kanban cards in a process and the inventory level? Pick one of the following answers [8.4]. A. There can never be more inventories in the process than what was authorized via Kanban cards. B. The inventory o
> In the Toyota Production System, jidoka refers to [8.4] a. Level production, where different models are produced alongside each other on the assembly line. b. Continuous improvement, where workers organize meetings to discuss ways of improving the produc
> Consider the following two production processes making an electronic component for a navigation system. Both processes consist of 20 stations and operate at a cycle time of 1 minute/unit. Their most error prone operation is step 9. Process 1: Has a final
> LaVilla is a village in the Italian Alps. Given its enormous popularity among Swiss, German, Austrian, and Italian skiers, all of its beds are always booked in the winter season and there are, on average, 1,200 skiers in the village. On average, skiers s
> If you were to implement heijunka at a production facility, which of the following tasks would you prioritize? [8.4] a. Encourage feedback among workers so as to introduce kaizen teams. b. Reduce setup and changeover times at the different stations. c. R
> Consider a worker-paced line with three process steps, each of which is staffed with one worker. The sequence of the three steps does not matter for the completion of the product. Currently, the three steps are operated in the following sequence. a. What
