Production and Operations Analysis, Seventh Edition
7th Edition
ISBN: 9781478623069
Author: Steven Nahmias, Tava Lennon Olsen
Publisher: Waveland Press, Inc.
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Chapter 5.7, Problem 24P
Summary Introduction
Interpretation:ABC classification system.
Concept introduction: the ABC classification system is one means of ranking items. Items are sequenced in decreasing order of annual dollar volume of sales or usage. Ordering the items in this way and graphing the cumulative dollar volume gives an exponential increasing curve known as a pareto curve.
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Table: Factors causing the decline in sales
Factors
% Contribution
Delayed deliveries
15%
Lack of delivery personnel
8%
Inaccurate sales orders
25%
Wrong deliveries
32%
Delayed invoicing
6%
Pilferage
7%
Expired items
7%
a. Following the Pareto Principle, what are the vital factors or main contributors to the decline in sales? Show your Pareto Chart and indicate or label the vital factors or contributors to the problem.
Hint: know the vital few %
b. What are the vital factors or vital contributors to the problem?
c. If the sales and marketing manager wants to reduce the impact of vital factors or contributors by 70%, what will be a good GOAL Statement to improve his sales problem?
Hint: Use SMART GOAL
21-
Which one of the following represent FIFO method of inventory evaluation?
a.
Old items remain in inventory
b.
Old merchandise is sold first
c.
New merchandise is sold first
d.
Average number of goods are sold
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question :
1/ According to Weele, the items that we measure determines the role of the purchasing function. List these roles, and show the mapping.
2/ According to Simpson and et.al, why should we measure the performance of our suppliers?
3/ According to Simpson and et. al, what are the characteristics of our suppliers should we measure? List these down in terms of evaluative criteria and its details.
Chapter 5 Solutions
Production and Operations Analysis, Seventh Edition
Ch. 5.2 - Prob. 1PCh. 5.2 - Prob. 2PCh. 5.2 - Prob. 4PCh. 5.3 - Prob. 7PCh. 5.3 - Prob. 9PCh. 5.3 - Prob. 12PCh. 5.5 - Prob. 16PCh. 5.5 - Prob. 18PCh. 5.6 - Prob. 21PCh. 5.7 - Prob. 24P
Ch. 5.7 - Prob. 25PCh. 5.7 - Prob. 26PCh. 5.7 - Prob. 27PCh. 5 - Prob. 28APCh. 5 - Prob. 31APCh. 5 - Prob. 32APCh. 5 - Prob. 33APCh. 5 - Prob. 37APCh. 5 - Prob. 38APCh. 5 - Prob. 40APCh. 5 - Prob. 41APCh. 5 - Prob. 43APCh. 5 - Prob. 44APCh. 5 - Prob. 45APCh. 5 - Prob. 46APCh. 5 - Prob. 47APCh. 5 - Prob. 48APCh. 5 - Prob. 49APCh. 5 - Prob. 50APCh. 5 - Prob. 51AP
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- What are the main differences between RMI and EJBarrow_forwardTable: Factors causing the decline in salesFactors % ContributionDelayed deliveries 15%Lack of delivery personnel 8%Inaccurate sales orders 25%Wrong deliveries 32%Delayed invoicing 6%Pilferage 7%Expired items 7% a. Following the Pareto Principle, what are the vital factors or main contributors to the decline in sales? Show your Pareto Chart and indicate or label the vital factors or contributors to the problem.Hint: know the vital few % b. What are the vital factors or vital contributors to the problem? c. If the sales and marketing manager wants to reduce the impact of vital factors or contributors by 70%, what will be a good GOAL Statement to improve his sales problem?arrow_forwardQuestion 1: Which of the following best defines " stockout costs"? options: A) They are physical goods used in operations. B) They are costs associated with retrieving inventory items from a workshop C) They are costs associated with interruptions to assembly lines D) They are associated with inventory being unavailable when needed to meet demand. E) None of the above. Question 2 At many LCBO stores in Ontario, Hennessy Cognac is kept in a clear locked case. Based on this information, according to the ABC Inventory Analysis method, is Hennessy most likely to be classified as an A item, a B item, a C item, or none of these? Question 2 options: A) C item B) None C) A item D) B item Question 3 What purpose does Rent the Runway's high-speed reverse logistics system serve? options: A) It allows the customers to return inventory to the fulfillment centre in record time. B) It allows the company to send inventory out to recipients (customers) in record time. C) It allows customers to return…arrow_forward
- What is the purpose of inventory control?arrow_forward25_______ can be reduced by working closely with key suppliers: Select one: a. Synchronization b. In-bound lead times c. Complexity d. Production costsarrow_forwardcan you please help me answer this question.... Rebar Company prepared the following analysis of its year-end inventory on December 31. First, determine the total lower of cost or market value for each product in Rebar Company's inventory. Second, prepare the journal entry needed at year-end to value the inventory at LCM, if applicable. Historical Cost Replacement Cost Product Quantity per unit per unit A 17 $430 $499 B 140 325 299 C 38 75 69arrow_forward
- What is Consignment Inventory? Advantages and disadvantages of Consignment Inventory for Vendors?arrow_forwardL. Houts Plastics is a large manufacturer of injection-molded plastics in North Carolina. An investigation of the company's manufacturing facility in Charlotte yields the information presented in the table below. How would the plant classify these items according to an ABC classification system? (Round dollar volume to the nearest whole number and percentage of dollar volume to two decimal places.) L. Houts Plastics Charlotte Inventory Levels Item Code Avg. Inventory (units) Value ($/unit) Dollar Volume % of Dollar Volume 1289 380 3.50 insert answer insert answer 2347 300 4.00 1,200 37.83 2349 120 2.50 300 9.46 2363 75 1.30 insert answer insert answer 2394 60 1.75 105 3.31 2395 25 2.00 insert…arrow_forward. The following table contains figures on the monthly volume and unit costs for a random sample of 16 items from a list of 2,000 inventory items at a health care facility. a-Develop an A-B-C classification for these items. b-Given the monthly usages in the following table, classify the items in A, B, and C categories according to dollar usage. c- Determine the percentage of items in each category and the annual dollar value for each category for part b. The principal table are in the picture belowarrow_forward
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