f the bakery currently makes 1,500 loaves per month with a labor productivity of 2.344 loaves per labor hour, then Lackey will need to add 4 worker(s) to meet the increased demand (recall that each worker works 160 hours per month and round your response up to the next whole number).
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- Scenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing expenditures for packaging materials with Jeff Joyner. Ben was particularly disturbed about the amount spent on corrugated boxes purchased from Southeastern Corrugated. Ben said, I dont like the salesman from that company. He comes around here acting like he owns the place. He loves to tell us about his fancy car, house, and vacations. It seems to me he must be making too much money off of us! Jeff responded that he heard Southeastern Corrugated was going to ask for a price increase to cover the rising costs of raw material paper stock. Jeff further stated that Southeastern would probably ask for more than what was justified simply from rising paper stock costs. After the meeting, Ben decided he had heard enough. After all, he prided himself on being a results-oriented manager. There was no way he was going to allow that salesman to keep taking advantage of Coastal Products. Ben called Jeff and told him it was time to rebid the corrugated contract before Southeastern came in with a price increase request. Who did Jeff know that might be interested in the business? Jeff replied he had several companies in mind to include in the bidding process. These companies would surely come in at a lower price, partly because they used lower-grade boxes that would probably work well enough in Coastal Products process. Jeff also explained that these suppliers were not serious contenders for the business. Their purpose was to create competition with the bids. Ben told Jeff to make sure that Southeastern was well aware that these new suppliers were bidding on the contract. He also said to make sure the suppliers knew that price was going to be the determining factor in this quote, because he considered corrugated boxes to be a standard industry item. Is Ben Gibson acting legally? Is he acting ethically? Why or why not?Scenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing expenditures for packaging materials with Jeff Joyner. Ben was particularly disturbed about the amount spent on corrugated boxes purchased from Southeastern Corrugated. Ben said, I dont like the salesman from that company. He comes around here acting like he owns the place. He loves to tell us about his fancy car, house, and vacations. It seems to me he must be making too much money off of us! Jeff responded that he heard Southeastern Corrugated was going to ask for a price increase to cover the rising costs of raw material paper stock. Jeff further stated that Southeastern would probably ask for more than what was justified simply from rising paper stock costs. After the meeting, Ben decided he had heard enough. After all, he prided himself on being a results-oriented manager. There was no way he was going to allow that salesman to keep taking advantage of Coastal Products. Ben called Jeff and told him it was time to rebid the corrugated contract before Southeastern came in with a price increase request. Who did Jeff know that might be interested in the business? Jeff replied he had several companies in mind to include in the bidding process. These companies would surely come in at a lower price, partly because they used lower-grade boxes that would probably work well enough in Coastal Products process. Jeff also explained that these suppliers were not serious contenders for the business. Their purpose was to create competition with the bids. Ben told Jeff to make sure that Southeastern was well aware that these new suppliers were bidding on the contract. He also said to make sure the suppliers knew that price was going to be the determining factor in this quote, because he considered corrugated boxes to be a standard industry item. As the Marketing Manager for Southeastern Corrugated, what would you do upon receiving the request for quotation from Coastal Products?Charles Lackey operates a bakery in Idaho Falls,Idaho. Because of its excellent product and excellent loca-tion, demand has increased by 25% in the last year. On far toomany occasions, customers have not been able to purchasethe bread of their choice. Because of the size of the store, nonew ovens can be added. At a staff meeting, one employeesuggested ways to load the ovens differently so that moreloaves of bread can be baked at one time. This new processwill require that the ovens be loaded by hand, requiring addi-tional manpower. This is the only thing to be changed. If thebakery makes 1,500 loaves per month with a labor produc-tivity of 2.344 loaves per labor-hour, how many workers willLackey need to add? (Hint: Each worker works 160 hours permonth.)
- Old Pueblo Engineering Contractors creates six-month “rolling” schedules, which are recomputed monthly. For competitive reasons (it would need to divulge proprietary design criteria, methods, and so on), Old Pueblo does not subcontract. Therefore, its only options to meet customer requirements are (1) work on regular time; (2) work on overtime, which is limited to 30 percent of regular time; (3) do customers’ work early, which would costan additional $5 per hour per month; and (4) perform customers’ work late, which would cost an additional $10 per hour per month penalty, as provided by their contract. Old Pueblo has 25 engineers on its staff at an hourly rate of $30. The overtime rate is $45. Customers’ hourly requirements for the six months from January to June are January 5000 February 4000 March 6000 April 6000 May 5000 June 4000 Develop an aggregate plan using a spreadsheet. Assume 20 working days in each month. 12. Alan Industries is expanding its product line to include three…Sanchez Trucking has been experiencing delays at its ware-house operations. Management hired a consultant to findout why service deliveries to local businesses have takenlonger than they should. The consultant narrowed down theproblem to the number of work crews loading and unload-ing trucks. Each crew consists of six employees who workas a team on a variety of tasks; each employee works a full40 hours a week. However, costs are also a concern. Theconsultant advised management that they could supplementwork crews with short-term employees, at a higher cost, tocover unexpected needs on a weekly basis. Each work crewpermanently hired by Sanchez costs $3,200 per week inwages and benefits, while a crew of short-term employeescosts $5,000 per week. Complicating the decision is the factthat the weekly hourly requirements for work crews is uncer-tain because of the volatility in the number of deliveries to bemade. Deliberating with management, the consultant arrivedat the following data:A local firm manufactures children’s toys. The projected demand over the next four months for one particular model of toy robot is (given) Assume that a normal workday is eight hours. Hiring costs are $350 per worker and firing costs (including severance pay) are $850 per worker. Holding costs are $4.00 per aggregate unit held per month. Assume that it requires an average of 1 hour and 40 minutes for one worker to assemble one toy. Shortages are not permitted. Assume that the ending inventory for June was 600 of these toys and the manager wishes to have at least 800 units on hand at the end of October. Assume that the current workforce level is 35 workers. Find the optimal plan by formulating as a linear program.
- Use the following information for the next 3 problems: ABC Company plans to construct a 60,000 sq. ft private warehouse and rent public warehouse as needed. Warehouse inventory turns at the rate of 2 times per month. One pound of merchandise occupies 0.2 cubic feet of warehouse space and can be stacked 10 feet high. Given aisles, and normal operating efficiency, only 50 percent of the total warehouse space is actually used for storage. Assume the facility is being built to size so no additional space is allowed for future product growth. A private warehouse can be constructed for $36 per sq. ft. and can be amortized over 20 years. Annual fixed costs amount to $20 per sq. ft. of total space. The cost of operation is $0.03 per pound of throughput. Space may also be rented for a storage charge on inventory of $0.06 per pound per month and a handling charge of $0.05 per pound of throughput. Monthly demands for a typical year are as follows: Month Demand (lb) Jan 2,000,000…Frank Johnson was outbound logistics manager for sudsy Soap.Inc. He had held the job for the past five years and had just about every distribution function well under control. His task was made easier because shipping patterns and volumes were unchanging routines. The firm’s management boasted that it had a steady share in “a stable market” although a few stock holders grumbled that sudsy soap had a declining share in a growing market. The sudsy soap plant was in Akron, Ohio. It routinely produced 100,000 (1.5 Kg) cartons of powdered dish soap each week each carton measured about 16 cm ,and each working day 15 to 20 railcar loads were loaded and shipped to various food chain warehouses and to a few large grocery brokers. Johnson worked with the marketing staff to establish prices , so nearly all soap was purchased in railcar –load lots .shipments less than a full carload did not occur very often . Buyers relied on dependable deliveries and the average length of time it took for a…Tyrene Products manufactures recreational equipment. One of the company’s products, a skate-board, sells for $37.50. The skateboards are manufactured in an antiquated plant that relies heavily on direct labor workers. Thus, variable costs are high, totaling $22.50 per skateboard of which60% is direct labor cost.Over the past year the company sold 40,000 skateboards, with the following operating results: Sales (40,000 skateboards) $1,500,000 Variable expenses 900,000 Contribution margin 600,000 Fixed expenses 480,000 Net operating income $ 120,000 Management is anxious to maintain and perhaps even improve its present level of income from theskateboards. Required: 1. Compute ( a ) the CM ratio and the break-even point in skateboards, and ( b ) the degree of oper-ating leverage at last year’s level of sales. 2. Due to an increase in labor rates, the company estimates that variable costs will increase by$3 per skateboard next year. If this change takes place and the selling…
- 1. A 32,000-seat baseball stadium is used 17 times for games, concerts, and graduation ceremonies. Each event averages five hours and assumes the stadium is full for each event. The stadium is available 365 days a year from 7 am to midnight. (Notice: the focus is stadium “seat” utilization). a. What is stadium (seat) utilization using Equation 7.1 (pg 146)? (Show your calculations) b. If in the above scenario, the utilization was 75% during the 17 events, but there were 2 additional events that garnered 100% utilization, would this be an increase or decrease in overall utilization from the result in “a”? (Show calculations) c. As an Operations Manager how would you improve utilization at the stadium? Provide at least three optional improvement plans with details. EQUATION 7.1 is : UTILIZATION (U) = Resources used / resources avaliable EQUATION 7.2 is: UTILIZATION (U) = Demand Rate / [Service Rate * Number of Servers]Give an example of a good and a service that exhibit these seasonal demand patterns: a. MonthlyYou have been asked to estimate the cost of 100 prefabricated structures to be sold to a local school district. Each structure provides 1,000 square feet offloor space, with 8-feet ceilings. In 1999, you produced 70 similar structures consistingof the same materials and having the same ceiling height, but each provided only 800square feet of floor space. The material cost for each structure was $25,000 in 1999, andthe cost capacity factor is 0.65. The cost index values for 1999 and 2006 are 200 and 289,respectively. The estimated manufacturing cost for the first 1,000-square-foot structureis $12,000. Assume a learning curve of 88% and use the cost of the 50th structure asyour standard time for estimating manufacturing cost. Estimate the total material costand the total manufacturing cost for the 100 prefabricated structures.