Problem 2. A large producer of household products purchases a glyceride used in one of its...
A manufacturer purchases the required raw material from an outside supplier. The company uses raw material at a relatively steady rate of 100 units per month and uses a 22 percent annual interest rate to compute holding costs According to the agreement between the manufacturer and the supplier the discount is applied to all unites in the order based on the following three offers. Order size Price per unit OsQ<600 310 600 SQ< 1,200 58 1,200 SQ 56 Assume that...
5. Skatz Company is one of the leading manufacturers of roller blades. In their plant they do assembly only, and all components are purchased from external suppliers. They are unhappy now with their current supplier of rollers and decided to find a new source for their top-of-the-line model. The demand is 400,000 rollers per year, and they received different price schedules from two different suppliers. Supplier A gave a flat rate of $3 per roller regardless of the quantity ordered....
a) FID Corporation produces silver widgets that it uses in joints and relays. FID needs to determine the order quantity, Q, to meet the annual demand at the lowest cost. The price of silver depends on the quantity ordered. Here are the price-breaks (for all-units discounts) and other data for the problem: Price of silver Annual demand Holding cost rate Ordering cost $0.85 per pound (lb) up to 2500 pounds $0.80 per lb for orders more than 2500 lbs and...
Hahn Manufacturing purchases a key component of one of its products from a local supplier. The current purchase price is $1,500 per unit. Efforts to standardize parts succeeded to the point that this same component can now be used in five different products. Annual component usage should increase from 150 to 850 units. Management wonders whether it is time to make the component in-house, rather than to continue buying it from the supplier. Fixed costs would increase by about $60,000...
2 Jackson Hole Manufacturing Jackson Hole Manufacturing is a small manufacturer of plastic products used in the automotive and computer industries. One of its major contracts is with a large computer company and involves the 2 production of plastic printer cases for the computer companys portable printers. The printer cases are produced on two injection molding machines. The M-100 machine has a production capacity of 25 printer cases per hour, and the M-200 machine has a production capacity of 40...
Lean Principles Bright Night, Inc., manufactures light bulbs. Its purchasing policy requires that the purchasing agents place each quarter’s purchasing requirements out for bid. This is because the Purchasing Department is evaluated solely by its ability to get the lowest purchase prices. The lowest bidder receives the order for the next quarter (90 working days). To make its bulb products, Bright Night requires 54,000 pounds of glass per quarter. Bright Night received two glass bids for the third quarter, as...
Jackson Hole Manufacturing is a small manufacturer of plastic products used in the automotive and computer industries. One of its major contracts is with a large computer company and involves the production of plastic printer cases for the computer companys portable printers. The printer cases are produced on two injection molding machines. The M-100 machine has a production capacity of 25 printer cases per hour, and the M-200 machine has a production capacity of 40 cases per hour. Both machines...
Underlying replenishment policies. 1. Wilson's formula 2. Order point method 3. Impact of discounting on replenishment I. Base Case Summary Getributes fully equipped bathrooms, as well as bathroom items (soap For a bathroom shelf, the supplier offered the following price the quantities ordered, with a replenishment period of usually The company Alsatian bathrooms distributes fu dishes, towel rails, tablets, etc.). For a bathr conditions: € 20 per unit, regardless of the quantitie one month. roduct is stable at 2,500 units....
1. Part U16 is used by Mcvean Corporation to make one of its products. A total of 18,000 units of this part are produced and used every year. The company's Accounting Department reports the following costs of producing the part at this level of activity: Per Unit Direct materials $ 3.90 Direct labor $ 8.50 Variable manufacturing overhead $ 9.00 Supervisor's salary $ 4.40 Depreciation of special equipment $ 2.80 Allocated general overhead $ 8.00 An outside supplier has offered...
You manage the shipping of item #A452 from your supplier. The shipments for this item are delivered to the nearest port, and you have to transport them to the distribution center. You have two options, truck load (TL) and less than truck load (LTL). Your company needs 5000 units of #A452 per year and it is purchased at a price of $38 per unit. Each order costs $93. Your company uses a holding charge of 0.14, a cycle service level...