Concept explainers
A
Want to see the full answer?
Check out a sample textbook solutionChapter 11 Solutions
Operations Management: Processes and Supply Chains (12th Edition) (What's New in Operations Management)
Additional Business Textbook Solutions
OPERATIONS MANAGEMENT IN THE SUPPLY CHAIN: DECISIONS & CASES (Mcgraw-hill Series Operations and Decision Sciences)
Operations Management, Binder Ready Version: An Integrated Approach
Loose-leaf for Operations Management (The Mcgraw-hill Series in Operations and Decision Sciences)
Operations Management
Operations Management: Sustainability and Supply Chain Management (12th Edition)
Business in Action (8th Edition)
- 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?arrow_forwardScenario 4 Sharon Gillespie, a new buyer at Visionex, Inc., was reviewing quotations for a tooling contract submitted by four suppliers. She was evaluating the quotes based on price, target quality levels, and delivery lead time promises. As she was working, her manager, Dave Cox, entered her office. He asked how everything was progressing and if she needed any help. She mentioned she was reviewing quotations from suppliers for a tooling contract. Dave asked who the interested suppliers were and if she had made a decision. Sharon indicated that one supplier, Apex, appeared to fit exactly the requirements Visionex had specified in the proposal. Dave told her to keep up the good work. Later that day Dave again visited Sharons office. He stated that he had done some research on the suppliers and felt that another supplier, Micron, appeared to have the best track record with Visionex. He pointed out that Sharons first choice was a new supplier to Visionex and there was some risk involved with that choice. Dave indicated that it would please him greatly if she selected Micron for the contract. The next day Sharon was having lunch with another buyer, Mark Smith. She mentioned the conversation with Dave and said she honestly felt that Apex was the best choice. When Mark asked Sharon who Dave preferred, she answered, Micron. At that point Mark rolled his eyes and shook his head. Sharon asked what the body language was all about. Mark replied, Look, I know youre new but you should know this. I heard last week that Daves brother-in-law is a new part owner of Micron. I was wondering how soon it would be before he started steering business to that company. He is not the straightest character. Sharon was shocked. After a few moments, she announced that her original choice was still the best selection. At that point Mark reminded Sharon that she was replacing a terminated buyer who did not go along with one of Daves previous preferred suppliers. Ethical decisions that affect a buyers ethical perspective usually involve the organizational environment, cultural environment, personal environment, and industry environment. Analyze this scenario using these four variables.arrow_forwardScenario 4 Sharon Gillespie, a new buyer at Visionex, Inc., was reviewing quotations for a tooling contract submitted by four suppliers. She was evaluating the quotes based on price, target quality levels, and delivery lead time promises. As she was working, her manager, Dave Cox, entered her office. He asked how everything was progressing and if she needed any help. She mentioned she was reviewing quotations from suppliers for a tooling contract. Dave asked who the interested suppliers were and if she had made a decision. Sharon indicated that one supplier, Apex, appeared to fit exactly the requirements Visionex had specified in the proposal. Dave told her to keep up the good work. Later that day Dave again visited Sharons office. He stated that he had done some research on the suppliers and felt that another supplier, Micron, appeared to have the best track record with Visionex. He pointed out that Sharons first choice was a new supplier to Visionex and there was some risk involved with that choice. Dave indicated that it would please him greatly if she selected Micron for the contract. The next day Sharon was having lunch with another buyer, Mark Smith. She mentioned the conversation with Dave and said she honestly felt that Apex was the best choice. When Mark asked Sharon who Dave preferred, she answered, Micron. At that point Mark rolled his eyes and shook his head. Sharon asked what the body language was all about. Mark replied, Look, I know youre new but you should know this. I heard last week that Daves brother-in-law is a new part owner of Micron. I was wondering how soon it would be before he started steering business to that company. He is not the straightest character. Sharon was shocked. After a few moments, she announced that her original choice was still the best selection. At that point Mark reminded Sharon that she was replacing a terminated buyer who did not go along with one of Daves previous preferred suppliers. What should Sharon do in this situation?arrow_forward
- Scenario 4 Sharon Gillespie, a new buyer at Visionex, Inc., was reviewing quotations for a tooling contract submitted by four suppliers. She was evaluating the quotes based on price, target quality levels, and delivery lead time promises. As she was working, her manager, Dave Cox, entered her office. He asked how everything was progressing and if she needed any help. She mentioned she was reviewing quotations from suppliers for a tooling contract. Dave asked who the interested suppliers were and if she had made a decision. Sharon indicated that one supplier, Apex, appeared to fit exactly the requirements Visionex had specified in the proposal. Dave told her to keep up the good work. Later that day Dave again visited Sharons office. He stated that he had done some research on the suppliers and felt that another supplier, Micron, appeared to have the best track record with Visionex. He pointed out that Sharons first choice was a new supplier to Visionex and there was some risk involved with that choice. Dave indicated that it would please him greatly if she selected Micron for the contract. The next day Sharon was having lunch with another buyer, Mark Smith. She mentioned the conversation with Dave and said she honestly felt that Apex was the best choice. When Mark asked Sharon who Dave preferred, she answered, Micron. At that point Mark rolled his eyes and shook his head. Sharon asked what the body language was all about. Mark replied, Look, I know youre new but you should know this. I heard last week that Daves brother-in-law is a new part owner of Micron. I was wondering how soon it would be before he started steering business to that company. He is not the straightest character. Sharon was shocked. After a few moments, she announced that her original choice was still the best selection. At that point Mark reminded Sharon that she was replacing a terminated buyer who did not go along with one of Daves previous preferred suppliers. What does the Institute of Supply Management code of ethics say about financial conflicts of interest?arrow_forwardThe forecasted requirements for an electric hand drill for the next 6 weeks are 15, 40, 10, 20, 50, and 30 units. The marketing department has booked orders totaling 20, 25, 10, and 20 units for delivery in the first (current), second, third, and fourth weeks. Currently, 30 hand drills are in stock. The policy is to order in lots of 60 units. Lead time is one week.a. Develop the MPS record for the hand drills.b. A distributor of the hand drills places an order for 15 units. What is the appropriate shipping date for the entire order?arrow_forwardProblem 11-11 (Static) A manager is attempting to put together an aggregate plan for the coming nine months. She has obtained a forecast of expected demand for the planning horizon. The plan must deal with highly seasonal demand; demand is relatively high in periods 3 and 4, and again in period 8, as can be seen from the following forecasts. Period 1 2 3 4 5 6 7 8 9 Total Forecast 190 230 260 280 210 170 160 260 180 1,940 The department now has 20 full-time employees, each of whom produces 10 units of output per period at a cost of $6 per unit. Beginning inventory for period 1 is zero. Inventory carrying cost is $5 per unit per period, and backlog cost is $10 per unit per period. The manager has decided to use part-time workers to assist during seasonal peaks. The cost per unit, including hiring and training, is $11. The output rate is 10 units per worker per period for all workers. A maximum of 10 part-time workers can be used, and the same number of part-time workers…arrow_forward
- Silver Star Bicycle Company will be manufacturing both men’s and women’s models of its Easy-Pedal bicycles during the next two months. Management wants to develop a production schedule indicating how many bicycles of each model should be produced in each month. Current demand forecasts call for 150 men’s and 125 women’s models to be shipped during the first month and 200 men’s and 150 women’s models to be shipped during the second month. Additional data are shown: Model Production Costs Current Inventory Men’s $120 20 Women’s 90 30 The company charges monthly inventory at the rate of 2% of the production cost based on the inventory levels at the end of the month. The company would like to have at least 25 units of each model in inventory at the end of the two months. Formulate this problem as a linear programming model so that a production schedule can be established in order to minimize production and inventory costs and satisfies the labor-smoothing,…arrow_forwardThe forecast demand for fudge for the next four months is 120, 160, 20, and 60 pounds. a. What is the recommended production rate if a level strategy is adopted with no backorders or stock outs? b. What is the ending inventory for Month 4 under this plan? c. What is the level production rate with no ending inventory in month 4.arrow_forwardCarlos Cavalas, the manager of Echo Products’ Brazilian Division, is trying to set the production schedule for the last quarter of the year. The Brazilian Division had planned to sell 70,070 units during the year, but by September 30 only the following activity had been reported: Units Inventory, January 1 0 Production 71,100 Sales 63,700 Inventory, September 30 7,400 The division can rent warehouse space to store up to 30,500 units. The minimum inventory level that the division should carry is 2,800 units. Mr. Cavalas is aware that production must be at least 4,440 units per quarter in order to retain a nucleus of key employees. Maximum production capacity is 44,200 units per quarter. Demand has been soft, and the sales forecast for the last quarter is only 19,500 units. Due to the nature of the division’s operations, fixed manufacturing overhead is a major element of product cost. Required: 1a. Assume that the division is using variable costing. How many…arrow_forward
- How does the Wilson approach handle demand forecasting and inventory planning for new product launches?arrow_forwardUsing the accompanying log–log graph, answer the following questions: a) What are the implications for management if it has forecast its cost on the optimum line? b) What could be causing the fluctuations above the optimum line? c) If management forecast the 10th unit on the optimum line, what was that forecast in hours? d) If management built the 10th unit as indicated by the actual line, how many hours did it take?arrow_forwardCapacity planning requires a demand forecast for an extended period of time into thefuture. What concerns would you have regarding an extended forecast as a capacityplanner?arrow_forward
- Practical Management ScienceOperations ManagementISBN:9781337406659Author:WINSTON, Wayne L.Publisher:Cengage,MarketingMarketingISBN:9780357033791Author:Pride, William MPublisher:South Western Educational PublishingPurchasing and Supply Chain ManagementOperations ManagementISBN:9781285869681Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. PattersonPublisher:Cengage Learning