1. Power Notebooks, Inc. plans to manufacture a new line of notebook computers.Management is trying to decide whether to purchase the LCD screens for thecomputers from an outside supplier or to manufacture the screens in-house. Thescreens cost $100 each from the outside supplier. To set up the assembly processrequired to produce the screens in-house would cost $100,000. The company couldthen produce each screen for $75. The number of notebooks that eventually will beproduced (Q) is unknown at this point.a. Set up a spreadsheet that will display the total cost of both options for anyvalue of Q. Use trial-and-error with the spreadsheet to determine the rangeof production volumes for which each alternative is best.b. Use a graphical procedure to determine the break-even point for Q (i.e., thequantity at which both options yield the same cost).2. Back Savers is a company that produces backpacks primarily for students. Theyare considering offering some combination of two different models-the Collegiateand the Mini. Both are made out of the same rip-resistant nylon fabric. Back Savershas a long-term contract with a supplier of the nylon and receives a 5000 square-foot shipment of the material each week. Each Collegiwhile each Mini requires 2 square feet. The sales forecasts indicate that at most1000 Collegiates and 1200 Minis can be sold per week. Each Collegiate requires 45minutes of labor to produce and generates a unit profit of $32. Each Mini requires40 minutes of labor and generates a unit profit of $24. Back Savers has 35 laborersthat each provides 40 hours of labor per week. Management wishes to know whatquantity of each type of backpack to produce per week.requires 3 square feeta. Formulate and solve a linear programming model for this problem on a spreadsheet.b. How much Collegiates and Minis should they produce to achieve the maximum totalprofit? How much is the maximum total profit?c. Formulate this same model algebraically.

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1. Power Notebooks, Inc. plans to manufacture a new line of notebook computers. Management is trying to decide whether to purchase the LCD screens for the computers from an outside supplier or to manufacture the screens in-house. The screens cost $100 each from the outside supplier. To set up the assembly process required to produce the screens in-house would cost $100,000. The company could then produce each screen for $75. The number of notebooks that eventually will be produced (Q) is unknown at this point. a. Set up a spreadsheet that will display the total cost of both options for any value of Q. Use trial-and-error with the spreadsheet to determine the range of production volumes for which each alternative is best. b. Use a graphical procedure to determine the break-even point for Q (i.e., the quantity at which both options yield the same cost).

1. Power Notebooks, Inc. plans to manufacture a new line of notebook computers. Management is trying to decide whether to purchase the LCD screens for the computers from an outside supplier or to manufacture the screens in-house. The screens cost $100 each from the outside supplier. To set up the assembly process required to produce the screens in-house would cost $100,000. The company could then produce each screen for $75. The number of notebooks that eventually will be produced (Q) is unknown at this point. a. Set up a spreadsheet that will display the total cost of both options for any value of Q. Use trial-and-error with the spreadsheet to determine the range of production volumes for which each alternative is best. b. Use a graphical procedure to determine the break-even point for Q (i.e., the quantity at which both options yield the same cost).

Purchasing and Supply Chain Management

6th Edition

ISBN:9781285869681

Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

ChapterC: Cases

Section: Chapter Questions

Problem 5.1SC: Scenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing...

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Scenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing expenditures for packaging materials with Jeff Joyner. Ben was particularly disturbed about the amount spent on corrugated boxes purchased from Southeastern Corrugated. Ben said, I dont like the salesman from that company. He comes around here acting like he owns the place. He loves to tell us about his fancy car, house, and vacations. It seems to me he must be making too much money off of us! Jeff responded that he heard Southeastern Corrugated was going to ask for a price increase to cover the rising costs of raw material paper stock. Jeff further stated that Southeastern would probably ask for more than what was justified simply from rising paper stock costs. After the meeting, Ben decided he had heard enough. After all, he prided himself on being a results-oriented manager. There was no way he was going to allow that salesman to keep taking advantage of Coastal Products. Ben called Jeff and told him it was time to rebid the corrugated contract before Southeastern came in with a price increase request. Who did Jeff know that might be interested in the business? Jeff replied he had several companies in mind to include in the bidding process. These companies would surely come in at a lower price, partly because they used lower-grade boxes that would probably work well enough in Coastal Products process. Jeff also explained that these suppliers were not serious contenders for the business. Their purpose was to create competition with the bids. Ben told Jeff to make sure that Southeastern was well aware that these new suppliers were bidding on the contract. He also said to make sure the suppliers knew that price was going to be the determining factor in this quote, because he considered corrugated boxes to be a standard industry item. Is Ben Gibson acting legally? Is he acting ethically? Why or why not?
Scenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing expenditures for packaging materials with Jeff Joyner. Ben was particularly disturbed about the amount spent on corrugated boxes purchased from Southeastern Corrugated. Ben said, I dont like the salesman from that company. He comes around here acting like he owns the place. He loves to tell us about his fancy car, house, and vacations. It seems to me he must be making too much money off of us! Jeff responded that he heard Southeastern Corrugated was going to ask for a price increase to cover the rising costs of raw material paper stock. Jeff further stated that Southeastern would probably ask for more than what was justified simply from rising paper stock costs. After the meeting, Ben decided he had heard enough. After all, he prided himself on being a results-oriented manager. There was no way he was going to allow that salesman to keep taking advantage of Coastal Products. Ben called Jeff and told him it was time to rebid the corrugated contract before Southeastern came in with a price increase request. Who did Jeff know that might be interested in the business? Jeff replied he had several companies in mind to include in the bidding process. These companies would surely come in at a lower price, partly because they used lower-grade boxes that would probably work well enough in Coastal Products process. Jeff also explained that these suppliers were not serious contenders for the business. Their purpose was to create competition with the bids. Ben told Jeff to make sure that Southeastern was well aware that these new suppliers were bidding on the contract. He also said to make sure the suppliers knew that price was going to be the determining factor in this quote, because he considered corrugated boxes to be a standard industry item. As the Marketing Manager for Southeastern Corrugated, what would you do upon receiving the request for quotation from Coastal Products?
Determine which factor of production is needed in the following problem. 1.The ABM manufacturing Co.hired a gardener.He uses a lawn mower for landscaping.Which factor of production would you consider this machine? 2.The owner of the company withdrew cash for the salaries of thw employees.which factor of production would you consider cash on hand? 3.The top manager of the firm said "the great ideas,consepts and emotional determination of a person to produce something that consumers want to buy" is very important for the company.What factor of production describes the ability to create great ideas? 4.The farmers planted pineapple cutting in the vacant area located in their locality.Which factor of production would you consider a pineapple plantation?
Q4) A manufacturer provides specialized microchips. During the next 3 months its sales, costs, and available time are shown in the table. Month 1 Month 2 Month 3 There are no chips in stock at the beginning of the first month. It takes 1.5 hr of production time to produce a chip and costs $5 to store a chip from one month to the next. Determine a production schedule that meets the demand requirements, does not exceed the monthly production time limitations, and minimizes cost. Note that no chips should be in stock at the end of the 3 months. Use fmincon. Chips required Cost regular time ($/chip) Cost overtime ($/chip) Regular operation time (hr) Overtime (hr) 1000 100 110 2500 100 120 2200 120 130 2400 2400 720 2400 720 720
123456789unn3u5167 10 5 6 Variable Cells 18 19 20 21 22 23 24 25 26 27 28 29 30 31 7 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 8 9 10 11 2 11 13 12 14 12 Constraints Name Cell $B$15 demand for A LHS $B$16 total demand LHS 16 17 $B$17 procssing time LHS Cell $C$8 A $D$8 B 15 16 Name Final Reduced Objective Allowable Allowable Value Cost Coefficient Increase Decrease 1E+30 250 100 Final Value Price 250 350 600 0 0 Shadow Constraint R.H. Side 0 4 -1 2 3 Q1 what is the range for objective coefficient of A and B? 125 350 600 1 1E+30 Allowable Allowable Increase Decrease Q4) if the objective coefficient of A goes up to 5 dollars what will happen? Q2 assume that the final value of B is 0 and the reduced cost of B is 1; explain the situation ? Q5 If the objective coefficient of B goes up to 8 dollars what will happen? Q6) if the obj coeff of A goes down to -5 dollars what does that mean? 125 125 100 1 Q3 if the objective coefficient of A goes down to 1 dollar and objective coefficient of B…
Q1:A/ The Office Supplies Company offers two types of pens, the first type has high specifications, while the second type has normal specifications. The expected profit from selling each unit of the first type is half a dollar, and from selling each unit of the second type is a quarter of a dollar. The time taken to manufacture the first type is twice the time taken to manufacture the second type for the purpose of producing no more than 1,000 pens of both types per week. The company can produce at most 400 units of the first type per week, and it can produce no more than 700 units of the second type per week. Note that the company can produce each of them separately. Required: Create the linear programming model to find the optimal production mix so that the company achieves the maximum possible profit.
Franklin Company makes fine jewelry that it sells to department stores throughout the United States. Franklin is trying to decide which of the two bracelets to manufacture. Cost data pertaining to the two choices follow. Bracelet A Bracelet B Cost of materials per unit Cost of labor per unit Advertising cost per year Annual depreciation on existing equipment %24 30 37 43 43 8,800 6,500 7,700 5,900 Required a. Identify the fixed costs and determine the amount of fixed cost for each product. b. Identify the variable costs and determine the amount of variable cost per unit for each product. c. Identify the avoidable costs and determine the amount of avoidable cost for each product.
2. Perform an ABC analysis for the data provided. Clearly explain why you classified items as A, B, or C. Annual Unit Item Usage 2400 Cost $19.51 $32.60 $10.20 $6.80 2 6200 3 8500 4 3200 6000 $4.50 $55.70 $3.60 $44.90 $35.62 750 7 8200 8 9000 5800 10 820 $82.60 $40.50 11 500 12 2000 $15.40 $14.60 $35.80 13 2400 14 6300 15 4750 $17.30 2700 $51.75 $42.90 $25.30 16 17 1600 18 1350 19 5000 $67.00 20 1000 $125.00
2. Discover ambiguities or omissions in the following statement of requirements for part ofa ticket-issuing system:An automated ticket-issuing system sells rail tickets. Users select their destination andinput a credit card and a personal identification number. The rail ticket is issued and themcredit card account charged. When the user presses the start button, a menu display ofpotential destinations are activated, along with a message to the user to select a destination.Once a destination has been selected, users are requested to input their credit card. Itsvalidity is checked and the user is then requested to input a personal identifier. When thecredit transaction has been validated; the ticket is issued.
Consider the following price and dividend data for Ford Motor Company: Dividend ($) Date December 31, 2004 January 26, 2005 April 28, 2005 July 29, 2005 October 28, 2005 December 30, 2005 Price ($) $14.04 $13.43 $9.14 OA. -44.4% OB. -40.2% OC.-42.32% OD. -38.1% $10.74 $8.02 $7.72 $0.12 $0.12 $0.12 $0.12 Assume that you purchased Ford Motor Company stock at the closing price on December 31, 2004 and sold it at the closing price on December 30, 2005. Your realized annual return is for the year 2005 is closest to:
28. 4.4 The Gorman Manufacturing Company must decide whether to purchase a component part from a supplier or to manufacture the component at its own plant. If demand is high, it would be to Gorman's advantage to manufacture the component. If demand is low, however, Gorman's unit manufacturing cost will be high because of underutilization of equipment. The projected profit in thousands of dollars for Gorman's make-or-buy decision is as follows. Demand Medium $40 $45 Decision Manufacture component Purchase component a. Determine the best decisions using the maximax, maximin, and opportunity loss decision criteria. b. Assume that the probability of low demand is 0.35, of medium demand is 0.35, and of high demand is 0.30. What is the best decision using the expected value criterion and what is the expected value of perfect information? Low $220 $210 High $100 $70
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