Purchasing and Supply Chain Management
6th Edition
ISBN: 9781285869681
Author: Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher: Cengage Learning
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Textbook Question
Chapter 16, Problem 10DQ
The chapter presented various approaches for the control of inventory investment. Discuss three additional approaches not included that might involve supply chain managers.
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Briefly describe the A-B-C inventory management strategy.
Identify the two basic decisions addressed by inventory
management and discuss why the responses to these deci-
Arrow Distributing Corp. likes to track inventory by using weeks of supply as well as by inventory turnover.
Arrow Distributing Corp.
Net Revenue
$16,100
Cost of sales
$12,450
Inventory
$1,100
Total assets
$8,460
Part 2
a) What is its weeks of supply?
enter your response here
weeks (round your response to two decimal places).
Part 3
b) What percentage of Arrow's assets are committed to inventory?
enter your response here%
(enter your response as a percentage rounded to two decimal places).
Part 4
c) What is Arrow's inventory turnover?
enter your response here
times per year (round your response to two decimal places).
Part 5
d) Suppose a manufacturer has an inventory turnover of 13.5 times per year. Arrow's supply chain performance relative to the manufacturer's, as measured by inventory turnover, is
▼
worse
the same
better
.
Chapter 16 Solutions
Purchasing and Supply Chain Management
Ch. 16 - What does it mean to say that higher inventory...Ch. 16 - How is purchasing directly and indirectly involved...Ch. 16 - What are some of the operational problems that...Ch. 16 - Discuss several reasons why managers often neglect...Ch. 16 - Why is the control of maintenance, repair, and...Ch. 16 - What are the benefits of calculating the total...Ch. 16 - Prob. 9DQCh. 16 - The chapter presented various approaches for the...Ch. 16 - Prob. 11DQCh. 16 - Prob. 12DQ
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the following data has been provided relating to one of the essential supplies that is utilized for Barloworld logistics operations. usage is approximately 10 brackets per day during the year. the brackets are purchased from a supplier 90km away and the costs incurred include holding costs per bracket per year of R1.50, order cost per order of R18.75. the lead time is 2 days and working days per year is 250 days. advise the management on the following inventory management issues. Examine the factors that you will prioritise at Barloworld in ensuring that inventory management adds value to the organisation and improves on its competitive advantage. what would be the economic order quantity? the annual inventory holding costs. how many orders would be made each year? what would be the annual order cost? what is the time between orders and the reorder point (ROP)?
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