OBA335 Final

Using data from a normal marble-packing process, it is established that in the X-bar chart, UCL=70 and LCL=56 with a center line at 63. If another sample is collected from workstation 6 with 55 and 65 marbles, which of the following sentences is correct?

The X-bar chart is under control mean of this sample = 60, it is under control

As an operations manager of a dish washer assembly line, which aspect of quality do you have the most control over?

conformance of the dish washer to the design specifications

pipeline

inventory is the inventory that has been ordered but not yet received, in other words, in transit or pipeline

anticipation

inventory is used to absorb uneven rates of demand or supply

a perpetual inventory system requires that

inventory records are always current

The bullwhip effect is characterized by:

ordering patterns that experience increasing variance as you proceed upstream in the chain

Which of the following is NOT a benefit of​ outsourcing?

technology transfer to another country or company

Which of the following is not a benefit of outsourcing

technology transfer to another country or company

a reorder point will fall if

the lead time falls

Which of these statements is NOT required in order for the EOQ model to be a reasonable approach?

the setup/ordering cost must exceed the annual holding cost of one unit

inventory holding cost

the sum of the cost of capital plus the variable costs of keeping items on hand, such as storage and handling costs and taxes, insurance, and shrinkage costs

which of the following is considered inventory for a restaurant

unsold ice cream

A part is produced in lots of 1,000 units. The average lead time for the part is 6 weeks and annual demand is 3,800 units, based on 50 business weeks per year. a. How many units of the part are held, on average, in cycle inventory? b. How many units of the part are held, on average, in pipeline inventory?

a. 500 units ---- 1000/2 b. 456 units ---- 3800/50 = 76 units lead time = 6 weeks 76 x 6 = 456 units

not operating brick-and-mortar retail outlets

low costs

which is considered inventory in your apartment

toilet paper in bath room closet

orders

upstream

Inversion​ Specialists, Inc., is relatively new in the industry and has calculated its inventory turnover at 5. What action would result in decreased inventory turns for Inversion​ Specialists, Inc.?

increase the average aggregate inventory value

working with suppliers to improve the quality of material they supply to you

prevention

An example of a type I error would be:

throwing away a perfectly god banana

payments

upstream

Scenario 1 You are the operations manager of a firm that uses the continuous inventory control system. Suppose the firm operates 50 weeks a year, 350 days, and has the following characteristics for its primary item: Demand = 500 units/week Price paid to supplier = $160/unit Ordering cost = $80/order Holding cost = $16/unit/year Lead time = 1.5 weeks Standard deviation in weekly demand = 36 units Use the information in Scenario 1. The economic order quantity for this item is ______ units per order?

500 (with margin: 0) EOQ = sqrt(2x500x50x80/16) = 500

If the marble picking process can achieve an average of 62 marbles per bag with a standard deviation of 4, while the requirement is that each bag must contain no less than 57 and no more than 63 marbles, which of the following sentences is TRUE:

All of the above Cp = (63-57)(6*4) = 0.25 Cpk = min((62-57)/(3*4), (63-62)/(3*4)) = 1/12

Which of the following items is the most obvious one for which EOQ should NOT be used?

Christmas trees

truck chassis

class A cycle counted weekly

adding robots to increase capacity

delivery speed

drop shipping

delivery speed

strategic location of distribution facilities

delivery speed

using usps sunday home deliveries

delivery speed

The​ 3-sigma limits for a process whose distribution conforms to the normal distribution includes​ _______ of the observed​ values, in the long run.

99.74%

Which is considered inventory in an automobile assembly factory?

All of the above: engines to be installed, nuts and bolts, half finished cars on the assembly line, finished cars waiting to be shipped

Inventory position = On-hand inventory + Scheduled receipts − Backorders

N/A

Read the opening case on Ford's Smart Inventory Management System (SIMS). This system runs on supercomputers with 1.5 terabytes of RAM (to put into perspective, your personal computer usually has 8 to 16 gigabytes of RAM, and 1 terabyte equals to 1000 gigabytes) and provides $100 million saving every year to Ford. What is the goal of this system?

To predict what type of cars and how many should be ordered

The fundamental purpose of supply chain design for a manufacturer is to control inventories by managing the flow of materials.

True

how many light bulbs are of the wrong wattage

attribute

The​ plan-do-study-act cycle illustrates

continuous improvement

using assembly-to-order to amalgamate items from different sources at transportation hubs

customization

Shipments of Product A from a distribution center to a retailer are made in lots of 350. The retailer's average demand for A is 75 units per week. Lead time from distributor to retailer is 3 weeks. The retailer pays for the shipments when they leave the distributor. The distributor has agreed to reduce the lead time to 2 weeks if the retailer will purchase quantities of 400 per shipment instead of 350. With the change in lead time, the pipeline inventory will _______.

decrease by 75 units 2 x 75 - 3 x 75 = -75 units

A hotel tracks the number of complaints per month. When the process is in control, there is an average of 35 complaints per month. Assume that a 2-sigma control limit is used. The next four months have 33, 27, 29, and 43 complaints. What should management do?

do nothing; the process is in control

finished products

downstream

An example of a type II error would be:

eating food that you were unaware was spoiled

repairing a car under manufacturer's warranty

external failure

Training workers to do their jobs properly and working with suppliers to improve the quality of material they supply to you are examples of

prevention costs

Responsive supply chains should be preferred​ when:

product variety is high

The Peach State Onion Company has an​ onion-bagging machine with a process distribution mean bag weight of 25 pounds with a standard deviation of 0.129 pounds. The company sells these bags with the stipulation that actual weight will be 25 lbs.​ +/- 0.45 pounds. Determine the process capability ratio for this process.

1.16

In a Q ​system, the demand rate for strawberry ice cream is normally​ distributed, with an average of 290 pints per week. The lead time is 6 weeks. The standard deviation of weekly demand is 14 pints. Refer to the standard normal table for​ z-values.

a. The standard deviation of demand during the 6​-week lead time is 34 pints. ​(Enter your response rounded to the nearest whole​ number.) 14*(6)^1/2 = 34 b. The average demand during the 6​-week lead time is 1740 pints. ​(Enter your response as an​ integer.) 290*6 = 1740 c. The reorder point that results in a​ cycle-service level of 92 percent is 1788 pints.

The supply chain management department of a major manufacturer pondered a particularly weighty make or buy decision for​ weeks, ultimately deciding to​ make, rather than buy. This decision resulted in​ increased:

backward integration

A firm may choose to use members of the distribution channel as if they were assembly stations in the factory. Such an approach is known​ as:

channel assembly

A producer of medical devices makes a single model that can be customized to talk in and display any of 47 different languages. This customization is performed in one of their five regional distribution centers as firm orders are received, providing an elegant example of ______.

channel assembly

​________ uses a​ firm's flexible processes to generate a wide variety of personalized services or products at reasonably low costs.

mass customization

Which of the following would be a "common" cause of variation? - a defective raw material causes inferior quality - an untrained worker produced more defective products - a machine in need of repair produced products of uneven sizes - all of the above are common causes of variation - none of the above is common cause of variation

none of the above is common cause of variation

You are the operations manager of a firm that uses the continuous inventory control system. Suppose the firm operates 50 weeks a year, 350 days, and has the following characteristics for its primary item: Demand = 500 units/week Price paid to supplier = $160/unit Ordering cost = $80/order Holding cost = $16/unit/year Lead time = 1.5 weeks Standard deviation in weekly demand = 36 units Use the information in Scenario 1. If the firm decides to switch to a P system with interval of 1 week, what would be the target inventory level to maintain a service level of 99% with everything else kept the same as in Scenario 1?

none of the above is correct 500 x (1 + 1.5) + 2.33 x SQRT(1+1.5) x 36

Which of the following changes would increase the likelihood of a supply chain experiencing the bullwhip effect? - using a more reliable delivery company - instituting a more accurate materials management information system - closely coordinating promotions with the internal marketing department and suppliers - none of the above would increase the likelihood of bullwhip effect

none of the above would increase the likelihood of bullwhip effect

Which of the following will NOT be a benefit when Panasonic chooses to do its R&D and manufacturing operations in a different country such as China or Vietnam rather than its home country Japan?

technology transfer to another country or company

When plotting values on a control​ chart, the first point that falls outside of the lower control limit​ (LCL) means

the cause should be investigated

backward integration is achieve through

the purchase of a controlling interest in the firm's supplier

Now use EOQ formula, what is the EOQ if the annual demand is 2,826 units, the annual holding cost is $129, and the ordering cost is $49 per order? You might get different numbers every time you redo this question. Round your answer to the nearest whole unit.

46 margin of error +/- 1

If the lead time is 4 days instead in Solved Problem 4, what is the reorder point for the Q system? Round to the nearest whole unit.

485 (with margin: 1) Safety stock = 1.41 x 30 x SQRT(4) = 84.6 or 85 mixers Reorder point = demand during 4 days + safety stock = 100 x 4 + 85 = 485 mixers

Problem 10 at the end of chapter (c. is not in the original question) Babble, Inc. buys 400 blank cassette tapes per month for use in producing foreign language courseware. The ordering cost is $12.50. Holding cost is $0.12 per cassette per year. How many tapes should Babble, Inc. order at a time? What is the time between orders? What is the optimal number of orders to place every year?

D - 4800 tapes/year H $0.12 per tape per year S - $12.50 per order EOQ - 1000 tapes per order TBO - 0.2083 year Optimal number of orders - 4.8 orders per year

Canon, a Japanese manufacturer of photographic equipment, decided against offshoring and kept its manufacturing and new product development processes in Japan, which has relatively high labor costs. In contrast, GM, headquartered in the United States, has a joint venture with Shanghai Auto Industry Corporation to produce cars in China. Given our discussion of outsourcing, off-shoring, and supply chain design, explain why these two companies chose different approaches to their supply chains and how the approaches selected support their respective operations strategies. In this example, ______ adopted offshoring strategy to compete on ______.

GM; cost

a bag of unused flour at a bakery could be an example of which category of inventory:

cycle inventory, safety shock inventory, anticipation inventory

Indicate the direction of change of the financial measures caused by the improvement in supply chain performance, i.e. which way the measures will go with a more efficient supply chain measure, with everything else remaining the same.

Total revenue - Increase COGS - decrease Operating expenses - decrease cash-to-cash time lag - decrease working capital - decrease return on assets - increase

Apologize for the poor quality of the video. I am aware of the comments regarding video quality but there aren't many good ones that we can use. Based on the video, would you agree that Clif Bar's supply chain design is more an efficient one than a responsive one?

True

Inventory

a stock of materials used to satisfy customer demand or to support the production of services or goods. Merchandise in Walmart and left-over milk and eggs in my refrigerator are typical examples of inventory

electrical wiring

class B cycle-counted monthly

An efficient supply chain should be preferred when:

demand is highly predictable

materials and parts

downstream

Shipments of Product A from a distribution center to a retailer are made in lots of 350. The retailer's average demand for A is 75 units per week. Lead time from distributor to retailer is 3 weeks. The retailer pays for the shipments when they leave the distributor. The distributor has agreed to reduce the lead time to 2 weeks if the retailer will purchase quantities of 400 per shipment instead of 350. With the change in purchased quantities, the average cycle inventory will _______.

increase by 25 units 400/2 - 350/2 = 200 - 175 = 25 units higher

a worker drilled too big a whole on a part so this part had to be scraped

internal failure

safety stock

inventory is surplus inventory that protects against uncertainties

cycle

inventory varies directly with lot size Q and is calculated as Average cycle inventory = Q/2

ABC Analysis

is the process of dividing SKUs into three classes according to their dollar usage so that managers can focus on items that have the highest dollar value.

A metal-cutting operation has a target value of 20 and consistently averages 19.8 with a standard deviation of 0.5. The design engineers have established an upper specification limit of 22 and a lower specification limit of 18. Which statement concerning this process is true? - the process capability ratio is 1.46 - the process capability index is 1.33 - the process is in control - none of the above

none of these is true Capability ratio Cp=(22-18)/(6x0.5)=1.33 Capability index Cpk=min[(19.8-18)/(3x0.5), (22-19.8)/(3x0.5)] = min[1.2, 1.47] = 1.2

The UCL and LCL for an chart are 25 and 15 respectively. The central line is 20, and the process variability is considered to be in statistical control. The results of the next six sample means are 18, 23, 17, 21, 24, and 16. What should you do?

nothing; the process is in control

A U.S. company faced with spiraling costs in their customer care center recreated that service in Luxembourg at a fraction of the cost. This is an example of:

offshoring

shipping costs for inventories are very high

pressure for large inventories

competition is so intense that customers will purchase immediately from your competitors if you are out of stock

pressure for largue inventories

insurance premium is high to insure the inventories

pressure for small inventories

interest rate is high to borrow capital from bank

pressure for small inventories

theft of inventories is very frequent

pressure for small inventories

how long a light bulb lasts

variable

EOQ (economic order quantity)

which is the lot size that minimizes total annual inventory holding and ordering costs

The defect rate for a product has historically been about 2.0%. What are the upper and lower control chart limits if you wish to use a sample size of 100 and 3-sigma limits? All answers are in (LCL,UCL) format.

(0.00, 0.062)

Thermostats are subjected to rigorous testing before they are shipped to air conditioning technicians around the world. Results from the last five samples are shown in the table. Note: each column is a sample, which must be entered in a row in OM Explorer. Calculate control limits for a chart that will monitor performance to target. The correct control limits as (LCL,UCL) are: Unit #Sample 1Sample 2Sample 3Sample 4Sample 5173.570.872.273.671.0271.371.073.172.772.2370.072.671.972.473.3471.170.670.374.273.6570.870.770.773.571.1 Here's a step-by-step video if you got lost. But please try on your own first.

(70.46, 73.39)

To test the salt content of potato chips at a Frito Lay production line, an employee would take three scoops of potato chips from the production line -- one from the left, one from the middle, and one from the right -- every 30 minutes, measure the salt content in each scoop, and then calculate the mean. In this case, the sample size is 3 scoops per sample and the sampling interval is every 30 minutes . In an 8-hour shift, this employee will collect 16 samples.

- 3 scoops per sample - every 30 minutes - 16 - every 30 minutes, this employee collects a sample of 3 scoops. In an 8-hour shift, 2 x 8 = 16 samples will be collected

Out of the total 22 dozens of cookies sold by Kristen's Cookie on a certain night, every cookie's shape and weight were slightly different from each other. This is an example of common causes. On the other hand, some of the cookies were a little over-cooked because the oven's timer malfunctioned a couple of times. This is an example of assignable causes.

- common -assignable

the main challenge of inventory management is to have:

- the right amount - of the right items - at the right location - at the right time

A sampling plan is best for evaluating quality when: (1) Inspection costs are high (2) Inspection costs are low (3) Non-destructive testing is available (4) Destructive testing is required

1 and 4

There are 5 assumptions for EOQ calculation:

1. The demand rate is constant and known with certainty. 2. No constraints are placed on the size of each lot. 3. The only two relevant costs are the inventory holding cost and the fixed cost per lot for ordering or setup. 4. Decisions for one item can be made independently of decisions for other items. 5. The lead time is constant and known with certainty. The amount received is exactly what was ordered and it arrives all at once rather than piecemeal.

The Peach State Onion​ Company's onion-bagging machine was found to operate at mean​ = 25.05 pounds with a standard deviation of 0.129 pounds. The company product specification calls for a bag weight of 25 lbs.​ +/- 0.45 lbs. Determine the process capability index.

1.03

You are the operations manager of a firm that uses the continuous inventory control system. Suppose the firm operates 50 weeks a year, 350 days, and has the following characteristics for its primary item: Demand = 500 units/week Price paid to supplier = $160/unit Ordering cost = $80/order Holding cost = $16/unit/year Lead time = 1.5 weeks Standard deviation in weekly demand = 36 units Use the information in Scenario 1. To achieve a service level of 99%, the safety stock should be set at ______ units.

103 (with margin: 1) safety shock = 36 x sqrt(1.5) x 2.33 = 103

If weekly demand of an item is always 66 units, and the lead time is always 2 weeks, the reorder point of this item is ______ units. This means, whenever the inventory position drops below this level, an order of a fixed quantity will be triggered. Be aware that you might get different numbers if you redo this question.

132

Scenario 1 You are the operations manager of a firm that uses the continuous inventory control system. Suppose the firm operates 50 weeks a year, 350 days, and has the following characteristics for its primary item: Demand = 500 units/week Price paid to supplier = $160/unit Ordering cost = $80/order Holding cost = $16/unit/year Lead time = 1.5 weeks Standard deviation in weekly demand = 36 units Use the information in Scenario 1. If the current lot size is 1000 units per order, orders are placed every ______ week(s).

2 1000/500 = 2 weeks

The reorder point should be ______units. Round to the nearest whole unit.

3,277 (with margin: 1) a. EOQ = SQRT(2 x 50,000 x 35 / 2) = 1322.88 or 1323 units b. Safety stock = 1.28 x 125 x sqrt(3) = 277 unitsAverage demand during lead time = 50,000 units/year / 50 weeks x 3 weeks = 3,000 units Reorder point = 3,000 + 277 = 3,277 units

In Example 9.9, the safety stock level is ______ units higher than if Q system is used.

7 (with margin: 0)

You are the operations manager of a firm that uses the continuous inventory control system. Suppose the firm operates 50 weeks a year, 350 days, and has the following characteristics for its primary item: Demand = 500 units/week Price paid to supplier = $160/unit Ordering cost = $80/order Holding cost = $16/unit/year Lead time = 1.5 weeks Standard deviation in weekly demand = 36 units Use the information in Scenario 1. The average pipeline inventory is ______ units.

750 500 x 1.5 = 750

Scenario 1 You are the operations manager of a firm that uses the continuous inventory control system. Suppose the firm operates 50 weeks a year, 350 days, and has the following characteristics for its primary item: Demand = 500 units/week Price paid to supplier = $160/unit Ordering cost = $80/order Holding cost = $16/unit/year Lead time = 1.5 weeks Standard deviation in weekly demand = 36 units Use the information in Scenario 1. The reorder point without considering safety stock is ______ units.

750 (with margin: 0) 500 units/wk x 1.5 weeks = 750 units

You are the operations manager of a firm that uses the continuous inventory control system. Suppose the firm operates 50 weeks a year, 350 days, and has the following characteristics for its primary item: Demand = 500 units/week Price paid to supplier = $160/unit Ordering cost = $80/order Holding cost = $16/unit/year Lead time = 1.5 weeks Standard deviation in weekly demand = 36 units Use the information in Scenario 1. If the current lot size is 1000 units per order, and the safety stock is set at 100 units, the total inventory holding cost for both cycle inventory and safety stock inventory is $______ per year.

9,600 (with margin: 0) (500 + 100) x 16 = 9600

A textile manufacturer wants to set up a control chart for irregularities​ (e.g., oil​ stains, shop​ soil, loose​ threads, and​ tears) per 100 square yards of carpet. The following data were collected from a sample of twenty​ 100-square-yard pieces of​ carpet: a. Using these​ data, set up a​ c-chart with z=3. The UCLc equals 21.67 and the LCLc equals 1.33. ​(Enter your responses rounded to two decimal​ places.) b. Suppose that the next five samples had 12​, 12​, 17​, 18​, and 21 irregularities. What do you​ conclude?

All of the sample points are within the control limits, so the processes is in control SCREENSHOT ON HOME SCREEN

The weeks of supply measure will improve if the weekly sales decrease.

False

The following shows financial data from Company A and Company B's 2012 annual reports: A B Sales $443,854 million $68,466 million Cost of Goods Sold $335,110 million $47,860 million Ending Inventory $ 40,714 million $ 7,918 million Beginning Inventory $ 36,437 million $ 7,596 million According to the data, ______

Company A turned over inventory faster A: 335110 / ((40714 + 36437) / 2) = 8.7 B: 47860 / ((7918 + 7596) / 2) = 6.2

A U.S. company faced with spiraling costs in their customer care center recreated that service in Luxembourg at a fraction of the cost. This is an example​ of:

offshoring

Which one of the following statements about the relation between financial and supply-chain performance measures is TRUE, assuming everything else remains the same?

Lower inventor turn-overs call for higher working capital requirements

You are the operations manager of a firm that uses the continuous inventory control system. Suppose the firm operates 50 weeks a year, 350 days, and has the following characteristics for its primary item: Demand = 500 units/week Price paid to supplier = $160/unit Ordering cost = $80/order Holding cost = $16/unit/year Lead time = 1.5 weeks Standard deviation in weekly demand = 36 units Use the information in Scenario 1. If the EOQ quantity is Q units, the safety stock is S units, the ROP, which is already adjusted for safety stock, is R units, the average order cycle is C days, which of the following sentences best describes the inventory policy under Q system?

Order Q units whenever the inventory level drops below R units. Since R already includes the safety shock, there is no need to include S. In a Q system, EOQ is always the optimal quantity to order

A company sells marbles online. In the warehouse, workers pack marbles into bags of 60 that would be shipped to customers. It is required that each bag must contain no less than 57 and no more than 63 marbles. The following data shows the number of marbles per bag from samples collected randomly from 5 different workstations. work station # of marbles in bag 1 62, 60 2 65, 71 3 64, 65 4 61, 57 5 59, 64 Given the following Excel OM explorer print-out, Is the following new sample under control?

Sample #6: 64, 71 Yes, under control Sample #7: 56, 68 No, out of control

​Garcia's Garage desires to create some colorful charts and graphs to illustrate how reliably its mechanics​ "get under the hood and fix the​ problem." The historic average for the proportion of customers that return for the same repair within the​ 30-day warranty period is 0.11. Each​ month, Garcia tracks 120 customers to see whether they return for warranty repairs. The results are plotted as a proportion to report progress toward the goal. If the control limits are to be set at two standard deviations on either side of the​ goal, determine the control limits for this chart. In​ March, 22 of the 120 customers in the sample group returned for warranty repairs. Is the repair process in​ control?

The UCLp equals .168 and the LCLp equals .052. ​(Enter your responses rounded to three decimal places​.) Is the repair process in​ control? p = .11 n = 120 (((.11(1-.11))/120)^1/2 = .029 z = 2 .11 + 2(.029) = .168 .11 - 2(.029) = .052 the sample proportion is outside the control​ limits, so the repair process is not in control.

An X-bar chart's UCL and LCL are 20 and 18 respectively with a center line at 19. A sample of two has just been collected with measurements of 20.6 and 18.4. Would you conclude that this process is out of control when this sample is collected?

The process is still under control because the mean of the sample is 19.5 and is between UCL and LCL.

The purpose of supply chain design is to shape a​ firm's supply chain to meet the competitive priorities of its operations strategies.

True

The purpose of supply chain management is to synchronize a​ firm's processes with those of its suppliers and customers.

True

You are the operations manager of a firm that uses the continuous inventory control system. Suppose the firm operates 50 weeks a year, 350 days, and has the following characteristics for its primary item: Demand = 500 units/week Price paid to supplier = $160/unit Ordering cost = $80/order Holding cost = $16/unit/year Lead time = 1.5 weeks Standard deviation in weekly demand = 36 units Use the information in Scenario 1. The supplier offers the following two contracts:Contract A: lot size 1000 units, lead time 1.5 weeksContract B: lot size 1250 units, lead time 1 week.Without considering safety stock, which contract results in a lower average aggregate (cycle + pipeline) inventory level for your firm?

Under contract A the inventory level is 125 units higher than B. A: 1000/2 + 1.5 x 500 = 1250 B: 1250/2 + 1 x 500 = 1125

A company is interested in monitoring the number of scratches on Plexiglass panels. The appropriate control chart to use would be:

a c-chart

Responsive supply chains should be preferred the most in which of the following scenarios?

a manufacturer of customized bicycles

Yellow Press, Inc. buys paper in 1,500-pound rolls for printing. Annual demand is 2,500 rolls. The cost per roll is $800, and the annual holding cost is 15 percent of the cost. Each order costs $50 to process. a. how many rolls should Yellow Press, Inc. order at a time? b. what is the time between orders?

a. 46 rolls b. 0.0184 year D = 2500 rolls/year, H = 15% x $800 = $120/roll/year, S = $50/order EOQ = sqrt(2 x 2500 x 50 / 120) = 46 rolls/order TBO = 46/2500 = 0.0184 year

The Canine Gourmet Company produces delicious dog treats for canines with discriminating tastes. Management wants the​ box-filling line to be set so that the process average weight per packet is 42 grams. To make sure that the process is in​ control, an inspector at the end of the filling line periodically selects a random box of 7 packets and weighs each packet. When the process is in​ control, the range in the weight of each sample has averaged 5 grams.

a. Design an​ R- and an x​-chart for this process. The UCLR equals 9.62 grams and the LCLR equals 0.38 grams. ​(Enter your response rounded to two decimal​ places.) The UCLx equals 44.10 grams and the LCLx equals 39.91 grams. ​(Enter your responses rounded to two decimal​ places.) b. The results from the last 5 samples of 7 packets are shown below. Is the process in​ control? Explain. The process variability is in statistical control and the process average is in statistical control.​ Therefore, the entire process is in control.

Jack​ Jones, the materials manager at Precision​ Enterprises, is beginning to look for ways to reduce inventories. A recent accounting statement shows that the inventory investment for raw materials is $3,282,800​, for​ work-in-process is $6,309,000​, and for finished goods is $2,991,000. This​ year's cost of goods sold will be about $28,808,000. Assume that there are 52 business weeks per year.

a. Express total inventory as weeks of supply. The weeks of supply is 22.7 weeks. ​(Enter your response rounded to one decimal place.​) Inventory value = Raw materials + WIP + Finished goods 3,282,800 + 6,309,000 + 2,991,000 = 12,582,800 Sales per week = COGS/52 weeks per year 28,808,000/52 = 554,000 Weeks of supply = AVG aggregate inventory value/ weekly sales (at cost) 12,582,800/554,000 = 22.7 b. Express total inventory as inventory turns. The inventory turnover is 2.3 turns per year. Inventory turnover = annual sales (at cost)/ avg aggregate inventory value 28,808,000/12,582,800 = 2.3

​Babble, Inc., buys 425 blank cassette tapes per month for use in producing foreign language courseware. The ordering cost is $11.75. Holding cost is $0.25 per cassette per year.

a. How many tapes should Babble order at a​ time? Babble should order 692 tapes at a time. ​(Enter your response rounded to the nearest whole​ number.) ((2*Demand*ordering cost)/holding cost)^1/2 ((2* (425x12)*11.75)/.25))^1/2 = 692 b. What is the time between​ orders? The time between orders is 1.6 months. ​(Enter your response rounded to one decimal​ place.) TBO eon = EOQ/D 692/425 = 1.6

A part is produced in lots of 800 units. It is assembled from 2 components worth $70 total. The value added in production​ (for labor and variable​ overhead) is $70 per​ unit, bringing total costs per completed unit to $140. The average lead time for the part is 3 weeks and annual demand is 4,100 units, based on 50 business weeks per year.

a. How many units of the part are​ held, on​ average, in cycle​ inventory? 400 units. ​(Enter your response as an​ integer.) Q/2 = 800/2 = 400 What is the dollar value of this​ inventory? ​$56000. ​(Enter your response as an​ integer.) $140 x 400 = 56000 b. How many units of the part are​ held, on​ average, in pipeline​ inventory? 246 units. ​(Enter your response as an​ integer.) 4,100/50 = 82 82 x 3 = 246 What is the dollar value of this​ inventory? ​(​Hint: Assume that the typical part in pipeline inventory is 50 percent completed.​ Thus, half the labor and variable overhead cost has been​ added, bringing the unit cost to ​$105​, or ​$70 ​+ ​$70​/2.) The dollar value of the inventory is ​$25830. 70 + 70/2 = 105 85 x 246 = 25830

Leaky​ Pipe, a local retailer of plumbing​ supplies, faces demand for one of its SKUs at a constant rate of 18,700 units per year. It costs Leaky Pipe $75 to process an order to replenish stock and $3.00 per unit per year to carry the item in stock. Stock is received 6 working days after an order is placed. No backordering is allowed. Assume 325 working days a year.

a. Leaky​ Pipe's optimal order quantity is 967 units. ​(Enter your response rounded to the nearest whole​ number.) EOQ = (2DS/H)^1/2 ((2*18,700*75)/3)^1/2 = 967 b. The optimal number of orders per year is 19 orders. ​(Enter your response rounded to the nearest whole​ number.) 18700/967 = 19 c. The optimal interval​ (in working​ days) between orders is 16.8 days. ​(Enter your response rounded to one decimal​ place.) 325/19 = 17.1? d. The demand during lead time is 345 units. ​(Enter your response rounded to the nearest whole​ number.) 18700/325 x 6 = 345 e. The reorder point is 345 units. ​(Enter your response rounded to the nearest whole​ number.) 345 + 0 = 345 f. The inventory position immediately after an order has been placed is 1312 units. ​(Enter your response rounded to the nearest whole​ number.) 345 + 967 - 0 = 1312

Petromax Enterprises uses a continuous review inventory control system for one of its SKUs. The following information is available on the item. The firm operates 52 weeks in a year. Refer to the standard normal table for​ z-values. ≻Demand = 52,000 ​units/year ≻Ordering cost​ = ​$30.00​/order ≻Holding cost​ = ​$3.50​/unit/year ≻Average lead time​ = 4 weeks ≻Standard deviation of weekly demand​ = 250 units

a. The economic order quantity for this item is 944 units. ​(Enter your response rounded to the nearest whole​ number.) ((2*52,000*30)/3.5)^1/2 = 944 b. If Petromax wants to provide a 96​% service​ level, the safety stock is 875 units ​(enter your response rounded to the nearest whole​ number) and the reorder point is 4,875 units SCREENSHOT ON HOME SCREEN

Wood County Hospital consumes 1,500 boxes of bandages per week. The price of bandages is $32 per​ box, and the hospital operates 52 weeks per year. The cost of processing an order is ​$15​, and the cost of holding one box for a year is 15 percent of the value of the material.

a. The hospital orders bandages in lot sizes of 1,000 boxes. What extra cost does the hospital​ incur, which it could save by using the EOQ​ method? ​$218.58. ​(Enter your response rounded to two decimal​ places.) EOQ = 2DS/H^1/2 Demand = 1,500*52 = 78,000 Holding Cost = 32*.15 = 4.8 ((2*78,000*15)/4.8)^1/2? b. Demand is normally​ distributed, with a standard deviation of weekly demand of 150 boxes. The lead time is 3 weeks. Refer to the standard normal table for​z-values. What safety stock is necessary if the hospital uses a continuous review system and a 97 percent​ cycle-service level is​ desired? 488488 boxes. ​(Enter your response rounded to the nearest whole​ number.) What should be the reorder​ point? 4,988 boxes. ​(Enter your response rounded to the nearest whole​ number.) c. If the hospital uses a periodic review​ system, with P=3 ​weeks, what should be the target inventory​ level, T​? 9,690 boxes. ​(Enter your response rounded to the nearest whole​ number.)

Nationwide Auto Parts uses a periodic review inventory control system for one of its stock items. The review interval is 10 weeks, and the lead time for receiving the materials ordered from its wholesaler is 2 weeks. Weekly demand is normally​ distributed, with a mean of 125 units and a standard deviation of 25 units. Refer to the standard normal table for​ z-values.

a. What is the average and the standard deviation of demand during the protection​ interval? The average demand during the protection interval is 1500 units. ​(Enter your response as an​ integer.) 125(10 + 2) = 1500 The standard deviation of demand is 86.60 units. ​(Enter your response rounded to two decimal​ places.) 25(10 + 2)^1/2= 86.60 b. If the firm desires 96 percent stockout​ protection, the target inventory level is 1647 units. ​(Enter your response rounded to the nearest whole​ number.) SCREENSHOT c. If 300 units were in stock at the time of a periodic​ review, 1347 units should be ordered. SCREENSHOT

a bakery holds the following category of inventory

all of the above three categories; raw materials, work-in-process, finished goods

A company is interested in monitoring the average time it takes to serve its customers. An appropriate control chart would be:

an ( ) chart.

A company is interested in monitoring the variability in the weight of the fertilizer bags it produces. An appropriate control chart would be:

an R-chart

match the changes on the left to the impact on EOQ on the right

annual demand increases - EOQ increases order/set up costs increases - EOQ increases holding costs increases - EOQ decreases

lot sizing

answers part of that challenge by determining when to order and how much to order inventory

inspecting incoming raw materials

appraisal

running a functional test on each item before it is boxed for shipment

appraisal

how many light bulbs are broken after delivery

attribute

how many light bulbs does not turn on

attribute

In 2012, Delta, the nation's second biggest carrier stunned the industry by becoming the first airline to buy an oil refinery (Links to an external site.), in a bid to trim its highest and most volatile operating cost, aviation fuel. This is an example of ______.

backward vertical integration

What is the safety stock level if the service level is set at 99% instead in Example 9.6? Round to the nearest whole unit.

between 16 and 17 If the service level is 99%, z = 2.33. Safety stock = 2.33 * 7.07 = 16.47 or 16/17 units

aluminum

class A counted weekly

upholstery for seats

class B cycle-counted monthly

nuts and bolts

class C cycle-counted quarterly

rivets

class C cycle-counted quarterly

A mass customization strategy has three important competitive advantages. Which of the following is NOT one of​ them?

eliminate raw material inventories

Regarding control charts, changing from three-sigma limits to two-sigma limits:

increases the probability of searching for an assignable cause when none exists

Which of the following DOES NOT generate pressure to decrease inventories?

increasing transportation costs increasing interest rate would increase inventory holding costs, therefore decreasing the EOQ, therefore lowering inventory level. increasing transportation costs would increase inventory ordering costs, therefore increasing the EOQ, therefore increasing inventory level. Faster product obsolescence causes the inventory on hand to become useless faster, therefore you should keep less inventory.

An external cause of disruption caused in the supply chain is:

late deliveries

ordering high volume from suppliers for lower price per unit

low costs

which of the following are NOT advantages of a periodic review system

lower safety stock

A typical manufacturer​ spends:

more than 60% of its total income from sales on purchased services and materials

A control chart typically does NOT show which of the following​ values?

outer limit

Lane Transit District (LTD) is interested in monitoring the number of bus runs that are more than 10 minutes late every day. The most appropriate SPC chart should be

p-chart if the total number of bus runs is known everyday

A somewhat successful computer manufacturer makes a generic computer in five exciting colors. Once orders are​ received, the computer guts are encased in the​customer's choice of colored case at the factory. This approach to production is known​ as:

postponement

design features for efficient supply chains include

predictable demand

Training workers to do their jobs properly

prevention

The objective of a firm in a responsive supply chain is likely to be realized if it has a:

short lead time

Scenario 1 You are the operations manager of a firm that uses the continuous inventory control system. Suppose the firm operates 50 weeks a year, 350 days, and has the following characteristics for its primary item: Demand = 500 units/week Price paid to supplier = $160/unit Ordering cost = $80/order Holding cost = $16/unit/year Lead time = 1.5 weeks Standard deviation in weekly demand = 36 units Use the information in Scenario 1. Which of the following changes would result in the biggest increase in economic order quantity?

the demand increases by 25% EOQ increases by SQRT(25%)

supply chain

the interrelated series of processes within a firm and across different firms that produces a service or product to the satisfaction of customers

The Walmart retail chain sells standardized items and enjoys great purchasing clout with its suppliers, none of which it owns. The Limited retail chain sells fashion goods and owns Mast Industries, which is responsible for producing many of the items sold in The Limited stores. The Limited boasts that it can go from the concept for a new garment to the store shelf in 1,000 hours. Compare and contrast the implications for supply chain design for these two retail systems. In this example, ______ adopted vertical integration strategy to compete on ______.

the limited; speed

The Mickey and Mouse Cat Food Factory runs an aggressive marketing campaign and much to the​ delight, orders surge to twice their previous level. If their operations manager uses an EOQ​ policy, what is the impact on the order​ quantity?

the order quantity will be 40% higher

customer feedback

upstream

demand information

upstream

how bright a light bulb is

variable

offering tens of millions of products

variety