Concept explainers
Terminator, Inc. manufactures a motorcycle part in lots of 250 units. The raw materials cost for the part is $150, and the value added in manufacturing 1 unit from its components is $300, for a total cost per completed unit of $450. The lead time to make the part is 3 weeks, and the annual demand is 4,000 units. Assume 50 working weeks per year.
- How many units of the part are held, on average, as cycle inventory? What is its value?
- How many ii nit S of the part are held, on average, as pipeline inventory? What is its value?
Want to see the full answer?
Check out a sample textbook solutionChapter 9 Solutions
Operations Management: Processes and Supply Chains, Student Value Edition Plus MyLab Operations Management with Pearson eText -- Access Card Package (11th Edition)
Additional Business Textbook Solutions
Operations Management, Binder Ready Version: An Integrated Approach
OPERATIONS MANAGEMENT IN THE SUPPLY CHAIN: DECISIONS & CASES (Mcgraw-hill Series Operations and Decision Sciences)
Operations and Supply Chain Management 9th edition
Business in Action (8th Edition)
Operations Management
Loose-leaf for Operations Management (The Mcgraw-hill Series in Operations and Decision Sciences)
- XYZ Company is a multinational company which exports ladies dresses to European countries. For the month of January, the total ordered quantity amounts to 14,400 pieces and lead time of 5 days is given to the company to finish the goods. Based on the time study conducted by the Senior Industrial Engineer, the standard time for this particular style of ladies dress is 5.0 mins/piece. Being an Industrial Engineer of the same plant, you were given the task to provide your superior of the following information given the additional data below: Salary per person = 400.00/day Working time = 7.5 hours/day Material Cost = 10,000.00 Miscellaneous Cost = 5,000.00 REQUIRED: Compute for the Production Cost 2. GIVEN: WARRANTY COST = P 30,000.00 DEVELOPMENT COST = 40,000.00 PRODUCTION COST = 60,000.00 COMPUTE FOR TOTAL COSTarrow_forwardConsider the following information. PART X Gross Requirements Scheduled Receipts Projected On-Hand Inventory 100 Q = 60, LT= 3 weeks, Safety Stock = 5 1 70 70 PART X Gross Requirements Scheduled Receipts Projected On-Hand Inventory 100 Planned Order Releases 1 70 70 100 2 0 > X WEEK 3 40 Compute the planned order releases and projected on-hand inventory for component part X. Round your answers to the nearest whole number. If your answer is zero, enter "0". 2 0 4 0 100 WEEK 3 40 5 160 60 4 0 40 0 X 5 160 Check My Work -60 0arrow_forwardA part is produced in lots of 1,400 units. It is assembled from 2 components worth $30 total. The value added in production (for labor and variable overhead) is $30 per unit, bringing total costs per completed unit to $60. The average lead time for the part is 5 weeks and annual demand is 4,100 units, based on 50 business weeks per year. How many units of the part are held, on average, in cycle inventory? _______________________units. (Enter your response as an integer.) What is the dollar value of this inventory? $________________________(Enter your response as an integer.) How many units of the part are held, on average, in pipeline inventory? ________________________________units. (Enter your response as an integer.) What is the dollar value of this inventory? $________________________ (Enter your response as an integer.) (Hint: Assume that the typical part in pipeline inventory is 50 percent completed. Thus, half the labor and variable overhead cost…arrow_forward
- Owen Conner works part-time packaging software for a local distribution company in Indiana. The annual i xed cost is $10,000 for this process, direct labor is $3.50 per package, and material is $4.50 per package. The selling price will be $12.50 per package. How much revenue do we need to take in before breaking even? What is the break-even point in units?arrow_forwardThe annual demand of ABC Inc. sole product totaled 450,000 units. Due to uncertainty in supply of items, the maximum possible lead time for the orders is 2 weeks and 1 day. A safety stock of 6,250 units is determined. What is the normal lead time? (Use 360 days) Choices: 1 week and 5 days 1 week 9 days 10 daysarrow_forwardPranuec Company mai Tactures, assembles, and rebunds material handing equipment used Tn war ses and uistr iters. One product, called a Liftmaster, is assembled from four components: a frame, a motor, two supports, and a metal strap. Frandec's production schedule calls for 6000 Liftmasters to be made next month. Frandec purchases the motors from an outside supplier, but the frames, supports, and straps may be either manufactured by the company or purchased from an outside supplier. Manufacturing and purchase costs per unit are shown. Component Manufacturing Cost Purchase Cost Frame $39.00 $52.00 Support $12.50 $16.00 Strap $7.50 $8.50 Three departments are involved in the production of these components. The time (in minutes per unit) required to process each component in each department and the available capacity (in hours) for the three departments are as follows: Department Component Cutting Milling Shaping Frame 3.6 2.3 3.2 Support 1.4 1.8 2.7 Strap 0.9 1.8 Capacity (hours) 370 430…arrow_forward
- Why is demand history irrelevant for the management of raw-materials and work-in-process inventories?arrow_forwardJulia Martin is the production manager of a ready to wear manufacturing outfit. A decision needs to be made about the type of clothing material or fabric to be used to make a shirt. The fabric that has been used in the previous production cost P 40 per yard but it is not available currently. Similar material from another supplier will cost P 50 per yard. Required: Identify all costs that you can see in the Julia Martin problem. Explain simply why you classified it as such.arrow_forward1. Decorative door (DD) consists of a wooden door (WD) and a handle (H). The wooden door consists of an isolation filling (IS) and three wooden plates (WP). Currently 30 handles and 100 wooden doors are on inventory. Final assembly takes 1 week. The handle has a lead time of 3 weeks. All other parts of decorative door have 1-week lead times. There are no scheduled receipts. All components use the lot-for-lot technique. The master schedule requires 80 units of decorative door in week 5 and 120 in week 8. Produce the MRP for the upcoming 8 weeks. a) Draw the bill of materials b) Produce the MRP for the upcoming eight weeks c) Produce a list of all planned order releasesarrow_forward
- Upon delivery, only the items quantity ordered on the PO(pruchase order) is received and a Daly Receiving Report (DRR)made by the supplier at the time of delivery. True or false? Plz send the answer fastarrow_forwardUse the quantity model for production orders.arrow_forwardI understand that as per the calculations, the gross requirement for week 3 is 50 (25*2) (Item A's order releases), week 5 is 190 (20*2) + (150*1) (Item A's order releases + Item B's order releases), and week 6 is 300 (150*2) (Item A's order releases). But I want to know why do we do it that way because If I have a similar question do I always multiply item A's order release for week 3 by 2, week 5 (Item A's order releases x 2 + Item B's order releases x 1), and and week 6 (Item A's order releases x 2 ) I want to understand why we do that so I can anwser a similar question I don't understand why we do that have way just that you did it that wayarrow_forward
- Practical Management ScienceOperations ManagementISBN:9781337406659Author:WINSTON, Wayne L.Publisher:Cengage,Operations ManagementOperations ManagementISBN:9781259667473Author:William J StevensonPublisher:McGraw-Hill EducationOperations and Supply Chain Management (Mcgraw-hi...Operations ManagementISBN:9781259666100Author:F. Robert Jacobs, Richard B ChasePublisher:McGraw-Hill Education
- Purchasing and Supply Chain ManagementOperations ManagementISBN:9781285869681Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. PattersonPublisher:Cengage LearningProduction and Operations Analysis, Seventh Editi...Operations ManagementISBN:9781478623069Author:Steven Nahmias, Tava Lennon OlsenPublisher:Waveland Press, Inc.