OPERATIONS MANAGEMENT W/MY OM LAB
12th Edition
ISBN: 9780135290958
Author: HEIZER
Publisher: PEARSON
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Chapter 13, Problem 2CS
Summary Introduction
Case summary:
Company AC is a distributor and producer of outdoor lighting fixtures. It operates three different plants to produce outdoor lighting fixtures and has five distribution centers. The capacity of distribution centers is as follows:
| Warehouse | Capacity (units) |
| Warehouse 1 | 9,000 |
| Warehouse 2 | 13,000 |
| Warehouse 3 | 11,000 |
| Warehouse 4 | 15,000 |
| Warehouse 5 | 8,000 |
Capacity of the three plants is given as follows:
| Plants | Capacity (units) |
| Plant 1, regular time | 27,000 |
| Plant 1, overtime | 7,000 |
| Plant 2, regular time | 20,000 |
| Plant 2, overtime | 5,000 |
| Plant 3, regular time | 25,000 |
| Plant 3, overtime | 6,000 |
Variable cost and fixed cost of each plant are given as follows:
| Plant | Variable cost per unit | Fixed cost per unit | |
| Operating | Not operating | ||
| Plant 1, regular time | $2.80 | $14,000 | $6,000 |
| Plant 1, overtime | $3.52 | ||
| Plant 2, regular time | $2.78 | $12,000 | $5,000 |
| Plant 2, overtime | $3.48 | ||
| Plant 3, regular time | $2.72 | $15,000 | $7,500 |
| Plant 3, overtime | $3.42 | ||
Distribution cost per unit is given as follows:
| From plants | Warehouse 1 | Warehouse 2 | Warehouse 3 | Warehouse 4 | Warehouse 5 |
| Plant 1 | $0.50 | $0.44 | $0.49 | $0.46 | $0.56 |
| Plant 2 | $0.40 | $0.52 | $0.50 | $0.56 | $0.57 |
| Plant 3 | $0.56 | $0.53 | $0.51 | $0.54 | $0.35 |
To determine: The implications of closing a plant.
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Rockwater management added two financial measures. Project profitability provided focus on the project as the basic unit for planning and control, and sales backlog helped reduce uncertainty of performance. Rockwater wanted to recognize the distinction between its two types of customers: Tier I customers, oil companies that wanted a high value-added relationship, and Tier II customers, those that chose suppliers solely on the basis of price. A price index, incorporating the best available intelligence on competitive position, was included to ensure that Rockwater could still retain Tier II customers’ business when required by competitive conditions. The company’s strategy, however, was to emphasize value-based business. An independent organization conducted an annual survey to rank customers’ perceptions of Rockwater’s services compared to those of its competitors. In addition, Tier I customers were asked to supply monthly satisfaction and performance ratings. Rockwater…
QUESTION
Rockwater management added two financial measures. Project profitability provided focus on the project as the basic unit for planning and control, and sales backlog helped reduce uncertainty of performance. Rockwater wanted to recognize the distinction between its two types of customers: Tier I customers, oil companies that wanted a high value-added relationship, and Tier II customers, those that chose suppliers solely on the basis of price. A price index, incorporating the best available intelligence on competitive position, was included to ensure that Rockwater could still retain Tier II customers’ business when required by competitive conditions. The company’s strategy, however, was to emphasize value-based business. An independent organization conducted an annual survey to rank customers’ perceptions of Rockwater’s services compared to those of its competitors. In addition, Tier I customers were asked to supply monthly satisfaction and performance ratings. Rockwater…
Chapter 13 Solutions
OPERATIONS MANAGEMENT W/MY OM LAB
Ch. 13 - Prob. 1DQCh. 13 - Why are SOP teams typically cross-functional?Ch. 13 - Prob. 3DQCh. 13 - Prob. 4DQCh. 13 - Prob. 5DQCh. 13 - Prob. 6DQCh. 13 - Question: 7. What is level scheduling? What is the...Ch. 13 - Question: 8. Define mixed strategy. Why would a...Ch. 13 - Prob. 9DQCh. 13 - Prob. 10DQ
Ch. 13 - Question: 11. What is the relationship between the...Ch. 13 - Prob. 12DQCh. 13 - Question: 13. What are major limitations of using...Ch. 13 - Prob. 14DQCh. 13 - Question: 13.1 Prepare a graph of the monthly...Ch. 13 - Prob. 2PCh. 13 - The president of Hill Enterprises, Terri Hill,...Ch. 13 - Prob. 4PCh. 13 - Prob. 5PCh. 13 - Prob. 6PCh. 13 - Prob. 7PCh. 13 - Prob. 8PCh. 13 - Prob. 9PCh. 13 - Question: 13.10 The SOP team (see Problem 13.9)...Ch. 13 - Prob. 11PCh. 13 - Prob. 12PCh. 13 - Prob. 13PCh. 13 - Question: 13.14 Jerusalem Medical Ltd., an...Ch. 13 - Prob. 15PCh. 13 - Prob. 16PCh. 13 - Prob. 17PCh. 13 - Question: 13.18 Jose Martinez of El Paso has...Ch. 13 - Prob. 19PCh. 13 - Prob. 24PCh. 13 - Prob. 25PCh. 13 - Prob. 26PCh. 13 - Prob. 1CSCh. 13 - Prob. 2CSCh. 13 - Prob. 1VCCh. 13 - Prob. 2VCCh. 13 - Question: 3. What are some concerns the team needs...
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