EBK OPERATIONS MANAGEMENT
14th Edition
ISBN: 9781260718447
Author: Stevenson
Publisher: MCG COURSE
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Textbook Question
Chapter 12, Problem 14DRQ
Explain how a decrease in setup time can lead to a decrease in the average amount of inventory a firm holds, and why that would be beneficial.
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Justify why a reduction in setup time will result in a reduction in the average amount of inventory held by a business.
Arthur Meiners is the production manager of Wheel-Rite, a small producer of metal parts. Wheel-Rite supplies Cal-Tex, a larger assembly company, with 10,000 wheel bearings each
year. This order has been stable for some time. Setup cost forWheel-Rite is $40, and holding cost is $.60 per wheel bearing per
year. Wheel-Rite can produce 500 wheel bearings per day. Cal-Tex is a just-in-time manufacturer and requires that 50 bearings
be shipped to it each business day.a) What is the optimum production quantity?b) What is the maximum number of wheel bearings that will be ininventory at Wheel-Rite?c) How many production runs of wheel bearings will Wheel-Ritehave in a year?d) What is the total setup 1 holding cost for Wheel-Rite?
The super discount store open 24 hours a day every day 365 days sells eight packs of paper towels at the rate of approximately 420 packs per week because the towers are so broke the annual cost to carry them in inventory is estimated at $.50 the cost to place an order for more is $20 and it takes four days for an order to arrive what is the cycle time? total cost?
Chapter 12 Solutions
EBK OPERATIONS MANAGEMENT
Ch. 12.3 - Prob. 1RQCh. 12 - What are the primary reasons for holding...Ch. 12 - What are the requirements for effective inventory...Ch. 12 - Briefly describe each of the costs associated with...Ch. 12 - What potential benefits and risks do RFID tags...Ch. 12 - Prob. 5DRQCh. 12 - Prob. 6DRQCh. 12 - a. List the major assumptions of the EOQ model. b....Ch. 12 - Explain briefly how a higher carrying cost can...Ch. 12 - What is safety stock, and what is its purpose?
Ch. 12 - Prob. 10DRQCh. 12 - What is meant by the term service level? Generally...Ch. 12 - Describe briefly the A-B-C approach to inventory...Ch. 12 - The purchasing agent for a company that assembles...Ch. 12 - Explain how a decrease in setup time can lead to a...Ch. 12 - What is the single-period model, and under what...Ch. 12 - Can the optimal stocking level in the...Ch. 12 - Prob. 17DRQCh. 12 - What trade-offs are involved in each of these...Ch. 12 - Who needs to be involved in inventory decisions...Ch. 12 - How has technology aided inventory management? How...Ch. 12 - To be competitive, many fast-food chains began to...Ch. 12 - As a supermarket manager, how would you go about...Ch. 12 - Sam is at the post office to mail a package. After...Ch. 12 - Give two examples of unethical conduct involving...Ch. 12 - Prob. 1PCh. 12 - a. The following table contains figures on the...Ch. 12 - A bakery buys flours in 25-pound bags. The bakery...Ch. 12 - A large law firm uses an average of 40 boxes of...Ch. 12 - Garden Variety Flower Shop uses 750 clay pots a...Ch. 12 - A produce distributor uses 800 packing crates a...Ch. 12 - A manager receives a forecast for next year....Ch. 12 - A food processor uses approximately 27,000 glass...Ch. 12 - The Friendly Sausage Factory (FSF) can produce hot...Ch. 12 - A chemical firm produces sodium bisulfate in...Ch. 12 - A company is about to begin production of a new...Ch. 12 - Prob. 12PCh. 12 - A mail-order house uses 18,000 boxes a year....Ch. 12 - A jewelry firm buys semiprecious stones to make...Ch. 12 - A manufacturer of exercise equipment purchases the...Ch. 12 - A company will begin stocking remote control...Ch. 12 - A manager just received a new price list from a...Ch. 12 - A newspaper publisher uses roughly 800 feet of...Ch. 12 - Given this information: Expected demand during...Ch. 12 - Given this information: Lead-time demand = 600...Ch. 12 - Demand for walnut fudge ice cream at the Sweet...Ch. 12 - The injection molding department of a company uses...Ch. 12 - A company uses 85 circuit boards a day in a...Ch. 12 - One item a computer store sells is supplied by a...Ch. 12 - The manager of a car wash received a revised price...Ch. 12 - A small copy center uses five 500-sheet boxes of...Ch. 12 - Ned's Natural Foods sells unshelled peanuts by the...Ch. 12 - Regional Supermarket is open 360 days per year....Ch. 12 - A service station uses 1,200 cases of oil a year....Ch. 12 - Caring Hospital's dispensary reorders doses of a...Ch. 12 - A drugstore uses fixed-order cycles for many of...Ch. 12 - Prob. 32PCh. 12 - Prob. 33PCh. 12 - Demand for jelly doughnuts on Saturdays at Don's...Ch. 12 - A public utility intends to buy a turbine as part...Ch. 12 - Skinner's Fish Market buys fresh Boston bluefish...Ch. 12 - A small grocery store sells fresh produce, which...Ch. 12 - Demand for devil's food whipped-cream layer cake...Ch. 12 - Prob. 39PCh. 12 - Demand for rug-cleaning machines at Clyde's...Ch. 12 - A manager is going to purchase new processing...Ch. 12 - A Las Vegas supermarket bakery must decide how...Ch. 12 - Offwego Airlines has a daily flight from Chicago...Ch. 12 - UPD Manufacturing produces a range of health care...Ch. 12 - Prob. 1.2CQCh. 12 - Prob. 2.1CQCh. 12 - SARAH LUBBERS AND CHRIS RUSCHE, GRAND VALLEY STATE...Ch. 12 - SARAH LUBBERS AND CHRIS RUSCHE, GRAND VALLEY STATE...Ch. 12 - Prob. 3.3CQCh. 12 - SARAH LUBBERS AND CHRIS RUSCHE, GRAND VALLEY STATE...Ch. 12 - Prob. 3.5CQCh. 12 - Prob. 1OTQCh. 12 - Prob. 2OTQCh. 12 - Prob. 3OTQCh. 12 - Prob. 4OTQ
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- Quick Fix Electronics Ltd purchases 8,000 transistors each year as components in minicomputers. The unit cost of each transistor is $10, and the cost of carrying one transistor in inventory for a year is $3. Ordering cost is $30 per order. Assume that Quick Fix Electronics Ltd operates a 200-day working year. What is the expected time between ordersarrow_forwardThe most important inventory item has annual holding costs of $506.00. One method of shipping this item is 4 days faster than the other, but it is $1.30 more per unit. How much more expensive is the slower method compared to the faster method? (Include the pennies in your answer)arrow_forwardScouts Corp. projects its sales to be 1,000 units this year. As a result of holding inventories, insurance, storage, taxes and other cost are incurred amounted to P2 per unit per year. Every time Scouts Corp. makes an order, P10 is incurred. On the average it takes 3 days to make and receive an order. (Use 360 days a year). Assuming Scouts Corp.’s inventory may take as 5 days to respond, how many units of inventory is the average daily usage? and what is the normal lead time usage?arrow_forward
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- Controlling inventory is one of Wheeled Coach’s toughest problems. Operating according to a strategy of mass customization and responsiveness, management knows that success is dependent on tight inventory control. Anything else results in an inability to deliver promptly, chaos on the assembly line, and a huge inventory investment. Wheeled Coach finds that almost 50% of the cost of every ambulance it manufactures is purchased materials. A large proportion of that 50% is in chassis (purchased from Ford), aluminum (from Reynolds Metal), and plywood used for flooring and cabinetry construction (from local suppliers). Wheeled Coach tracks these A inventory items quite carefully, maintaining tight security/control and ordering carefully so as to maximize quantity discounts while minimizing on-hand stock. Because of long lead times and scheduling needs at Reynolds, aluminum must actually be ordered as much as 8 months in advance. In a crowded ambulance industry in which it is the only…arrow_forwardControlling inventory is one of Wheeled Coach’s toughest problems. Operating according to a strategy of mass customization and responsiveness, management knows that success is dependent on tight inventory control. Anything else results in an inability to deliver promptly, chaos on the assembly line, and a huge inventory investment. Wheeled Coach finds that almost 50% of the cost of every ambulance it manufactures is purchased materials. A large proportion of that 50% is in chassis (purchased from Ford), aluminum (from Reynolds Metal), and plywood used for flooring and cabinetry construction (from local suppliers). Wheeled Coach tracks these A inventory items quite carefully, maintaining tight security/control and ordering carefully so as to maximize quantity discounts while minimizing on-hand stock. Because of long lead times and scheduling needs at Reynolds, aluminum must actually be ordered as much as 8 months in advance. In a crowded ambulance industry in which it is the only…arrow_forwardControlling inventory is one of Wheeled Coach’s toughest problems. Operating according to a strategy of mass customization and responsiveness, management knows that success is dependent on tight inventory control. Anything else results in an inability to deliver promptly, chaos on the assembly line, and a huge inventory investment. Wheeled Coach finds that almost 50% of the cost of every ambulance it manufactures is purchased materials. A large proportion of that 50% is in chassis (purchased from Ford), aluminum (from Reynolds Metal), and plywood used for flooring and cabinetry construction (from local suppliers). Wheeled Coach tracks these A inventory items quite carefully, maintaining tight security/control and ordering carefully so as to maximize quantity discounts while minimizing on-hand stock. Because of long lead times and scheduling needs at Reynolds, aluminum must actually be ordered as much as 8 months in advance. In a crowded ambulance industry in which it is the only…arrow_forward
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