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production and operations management

Operations Management: Sustainability And Supply Chain Management 13th Edition Jay Heizer; Barry Render; Chuck Munson - Solutions

19. The structure of MRP systems suggests “buckets” and infinite loading. What is meant by these two terms?
Using the product structure for Alpha in Solved Problem 14.1, and the following lead times, quantity on hand, and master production schedule, prepare a net MRP table for Alphas. LEAD QUANTITY ITEM TIME ON HAND Alpha 1 10 B C W3 2 20 0 D 1 100 EF 1 10 1 50
Hip Replacements, Inc., has a master production schedule for its newest model, as shown on page 626, a setup cost of $50, a holding cost per week of $2, beginning inventory of 0, and lead time of 1 week. What are the costs of using (a) EOQ and (b)POQ for this 10-week period?
• • 14.6 Using the information in Problem 14.5, construct a gross material requirements plan.
• • 14.7 Using the information in Problem 14.5, construct a net material requirements plan using the following on-hand inventory ON-HAND ON-HAND ITEM INVENTORY ITEM INVENTORY STU> 20 W 30 20 X 25 40 Y 240 30 Z 40
• • 14.8 Refer again to Problems 14.5 and 14.6. In addition to 100 units of S, there is also a demand for 20 units of U, which is a component of S. The 20 units of U are needed for maintenance purposes. These units are needed in week 6. Modify the gross material requirements plan to reflect
• • 14.9 Refer again to Problems 14.5 and 14.7. In addition to 100 units of S, there is also a demand for 20 units of U, which is a component of S. The 20 units of U are needed for maintenance purposes. These units are needed in week 6. Additionally, a new order has been received for 80 units
• • 14.10a) Given the product structure and master production schedule shown in Figure 14.12, develop a gross requirements plan for all items.b) Given the product structure, master production schedule, and inventory status shown in Figure 14.12, develop a net requirements plan (planned order
• • • 14.11 Given the product structure, master production schedule, and inventory status in Figure 14.13, and assuming the requirements for each BOM item is 1:a) develop a gross requirements plan for Item C;b) develop a net requirements plan for Item C. PERIOD 8 9 10 11 12 Gross
• • • • 14.12 Based on the data in Figure 14.13, complete a net material requirements schedule for:a) All items (10 schedules in all), assuming the requirement for each BOM item is 1.b) All 10 items, assuming the requirement for all items is 1, except B, C, and F, which require 2 each.
• • • 14.14 A part structure, lead time (weeks), and on-hand quantities for product A are shown in Figure 14.14. From the information shown, generate:a) An indented bill of material for product A (see Figure 5.9 in Chapter 5 as an example of a BOM).b) Net requirements for each part to produce
• • • 14.16 You have just been notified that the lead time for component G of product A (Problem 14.15 and Figure 14.14) has been increased to 5 weeks.a) Which items have changed, and why?b) What are the implications for the production plan?c) As production planner, what can you do?
• • • 14.18 A toy manufacturer has an outstanding order of 1,000 units for one of its toys in week 7. The table below provides information about the components, on-hand inventory, and lead time.Subscripts indicate quantity required for each parent. Assume lot-for-lot ordering. Below is the
• • 14.19 Using the data in Problem 14.18, develop net material requirement plans for the toy and Item A.
• • • 14.21 Using the information in Problem 14.20, construct a net material requirements plan. There are 2 Alphas on hand and 4 Ds
• • • 14.22 Develop a lot-for-lot solution and calculate total relevant costs for the data in the preceding table. PERIOD 1 2 3 4 5 6 7 8 9 10 11 12 Gross requirements 30 40 30 70 20 10 80 50 *Holding cost $2.50/unit/week; setup cost $150; lead time = 1 week; beginning inventory 40; stockout
• • • 14.23 Develop an EOQ solution and calculate total relevant costs for the data in the preceding table. PERIOD 1 2 3 4 5 6 7 8 9 10 11 12 Gross requirements 30 40 30 70 20 10 80 50 *Holding cost $2.50/unit/week; setup cost $150; lead time = 1 week; beginning inventory 40; stockout cost =
• • • 14.24 Develop a POQ solution and calculate total relevant costs for the data in the preceding table. PERIOD 1 2 3 4 5 6 7 8 9 10 11 12 Gross requirements 30 40 30 70 20 10 80 50 *Holding cost $2.50/unit/week; setup cost $150; lead time = 1 week; beginning inventory 40; stockout cost =
• • • 14.25 Using your answers for the lot sizes computed in Problems 14.22, 14.23, and 14.24, which is the best technique and why? PERIOD 1 2 3 4 5 6 7 8 9 10 11 12 Gross requirements 30 40 30 70 20 10 80 50 *Holding cost $2.50/unit/week; setup cost $150; lead time = 1 week; beginning
• • 14.26 M. de Koster, of Rene Enterprises, has the master production plan shown here:Lead time = 1 period; setup cost = $200; holding cost = $10 per week; stockout cost = $10 per week. Your job is to develop an ordering plan and costs for:a) Lot-for-lot.b) EOQ.c) POQ.d) Which plan has the
• • • 14.29 Karl Knapps, Inc., has received the following orders:The entire fabrication for these units is scheduled on one machine.There are 2,250 usable minutes in a week, and each unit will take 65 minutes to complete. Develop a capacity plan, using lot splitting, for the 10-week time
• • • 14.30 Coleman Rich, Ltd., has received the following orders:The entire fabrication for these units is scheduled on one machine.There are 2,250 usable minutes in a week, and each unit will take 65 minutes to complete. Develop a capacity plan, using lot splitting, for the 10-week time
• • • • 14.32 Using the data for the coffee table in Problem 14.31, build a labor schedule when the labor standard for each top is 2 labor-hours; each leg including brass cap installation requires 1/4 hour, as does each pair of braces. Base assembly requires 1 labor-hour, and final assembly
1. Prepare a plan for Art Hill that gets the firm back on a course toward improved profitability. Be sure to identify the symptoms, the problems, and the specific changes you would implement.Hill’s Automotive, Inc., is an aftermarket producer and distributor of automotive replacement parts. Art
2. Explain how MRP plays a role in this plan.Hill’s Automotive, Inc., is an aftermarket producer and distributor of automotive replacement parts. Art Hill has slowly expanded the business, which began as a supplier of hard-to-get auto airconditioning units for classic cars and hot rods. The firm
1. Prepare a bill of material explosion and total cost for the 216 portions of Cheeto Crusted Mac & Cheese.With vast experience at venues such as the American Airlines Arena (in Miami), the Kentucky Derby, and Super Bowls, Chef John Nicely now also plans huge culinary events at Orlando’s
2. What is the cost per portion? How much less expensive is the Cheeto Crusted Mac & Cheese than Chef John’s alternative creation, the Buffalo Chicken Mac & Cheese, shown in Figure 14.9 of this chapter?With vast experience at venues such as the American Airlines Arena (in Miami), the
3. Assuming that there is no beginning inventory of the Cheeto Crusted Mac & Cheese and cooking time for the entire 216 portions is 0.6 hours, when must preparation begin?With vast experience at venues such as the American Airlines Arena (in Miami), the Kentucky Derby, and Super Bowls, Chef
1. Why is accurate inventory such an important issue at Wheeled Coach? Wheeled Coach, the world’s largest manufacturer of ambulances, builds thousands of different and constantly changing configurations of its products. The custom nature of its business means lots of options and special
2. Why does Wheeled Coach have excess inventory, and what kind of a plan would you suggest for dealing with it? Wheeled Coach, the world’s largest manufacturer of ambulances, builds thousands of different and constantly changing configurations of its products. The custom nature of its business
3. Be specific in your suggestions for reducing inventory and how to implement them. Wheeled Coach, the world’s largest manufacturer of ambulances, builds thousands of different and constantly changing configurations of its products. The custom nature of its business means lots of options and
LO 14.1 In a product structure diagram:a) parents are found only at the top level of the diagram.b) parents are found at every level in the diagram.c) children are found at every level of the diagram except the top level.d) all items in the diagrams are both parents and children.e) all of the above.
LO 14.4 A lot-sizing procedure that orders on a predetermined time interval with the order quantity equal to the total of the interval’s requirement is:a) periodic order quantity.b) part period balancing.c) economic order quantity.d) all of the above.
LO 14.5 MRP II stands for:a) material resource planning.b) management requirements planning.c) management resource planning.d) material revenue planning.e) material risk planning.
LO 14.6 A(n) ______ MRP system provides information to the capacity plan, to the master production schedule, and ultimately to the production plan.a) dynamicb) closed-loopc) continuousd) retrospectivee) introspective
LO 14.7 Which system extends MRP II to tie in customers and suppliers?a) MRP IIIb) JITc) IRPd) ERPe) Enhanced MRP II
David Rivera Optical has determined that its reorder point for eyeglass frames is 50 (d * L) units. Its carrying cost per frame per year is $5, and stockout (or lost sale) cost is $40 per frame. The store has experienced the following probability distribution for inventory demand during the lead
Memphis Regional Hospital stocks a “code blue” resuscitation kit that has a normally distributed demand during the reorder period. The mean (average) demand during the reorder period is 350 kits, and the standard deviation is 10 kits. The hospital administrator wants to follow a policy that
• 12.5 Barbara Flynn’s company has compiled the following data on a small set of products:Perform an ABC analysis on her data. ITEM ANNUAL DEMAND UNIT COST A 100 $300 BED 75 100 50 50 200 100 E 150 75
• • 12.6 Lynn Fish opened a new beauty-products retail store.There are numerous items in inventory, and Lynn knows that there are costs associated with inventory. However, because her time is limited, she cannot carefully evaluate the inventory policy for all products. Lynn wants to classify
• • 12.22 Bell Computers purchases integrated chips at $350 per chip. The holding cost is $35 per unit per year, the ordering cost is $120 per order, and sales are steady, at 400 per month. The company’s supplier, Rich Blue Chip Manufacturing, Inc., decides to offer price concessions in order
• • • 12.27 Chris Sandvig Irrigation, Inc., has summarized the price list from four potential suppliers of an underground control valve. See the accompanying table on the next page. Annual usage is 2,400 valves; order cost is $10 per order; and annual inventory holding costs are $3.33 per
• • • 12.43 Authentic Thai rattan chairs (shown in the photo)are delivered to Gary Schwartz’s chain of retail stores, called The Kathmandu Shop, once a year. The reorder point, without safety stock, is 200 chairs. Carrying cost is $30 per unit per year, and the cost of a stockout is $70 per
• • 12.44 A local hypermarket in Kuwait supplies juice boxes from a manufacturer in Saudi Arabia. The reorder point, without safety stock, is 800 boxes. The carrying cost is KWD 20 (Kuwaiti Dinar) per box per year, and the ordering cost is KWD 50 per box per year. Given the following demand
• • • 12.45 Mr. Beautiful, an organization that sells weight training sets, has an ordering cost of $40 for the BB-1 set. (BB-1 stands for Body Beautiful Number 1.) The carrying cost for BB-1 is $5 per set per year. To meet demand, Mr. Beautiful orders large quantities of BB-1 7 times a year.
3. How can you address demand that is not level throughout the planning horizon?Zhou Bicycle Company (ZBC), located in Seattle, is a wholesale distributor of bicycles and bicycle parts. Formed in 1981 by University of Washington Professor Yong-Pin Zhou, the firm’s primary retail outlets are
1. What inventory adjustment might Celebrity make to prepare for an extreme event such as a hurricane or mechanical failure while at sea?Sandwiched between mass-market cruise line players such as Carnival and Disney, and luxury cruise lines such as Crystal Cruises, Celebrity is making a name for
2. What inventory management techniques seen in this chapter could be used at Celebrity?Sandwiched between mass-market cruise line players such as Carnival and Disney, and luxury cruise lines such as Crystal Cruises, Celebrity is making a name for itself in the “premium”market, offering both an
3. How should a cost analysis be performed to determine whether to buy at a foreign port or to ship supplies from Celebrity’s U.S.base in Florida?Sandwiched between mass-market cruise line players such as Carnival and Disney, and luxury cruise lines such as Crystal Cruises, Celebrity is making a
4. In many respects, the food inventory decision for each Celebrity cruise matches the single-period inventory model described in this chapter. Consider the decision about chicken. Suppose that Celebrity purchases chicken in bulk for $0.80 per pound, and any chicken left over after a cruise is
A Juarez, Mexico, manufacturer of roofing supplies has developed monthly forecasts for a family of products. Data for the 6-month period January to June are presented in Table 13.2. The firm would like to begin development of an aggregate planAPPROACH c Plot daily and average demand to illustrate
One possible strategy (call it plan 1) for the manufacturer described in Example 1 is to maintain a constant workforce throughout the 6-month period. A second (plan 2) is to maintain a constant workforce at a level necessary to meet the lowest demand month (March) and to meet all demand above this
ANALYSIS OF PLAN 2 APPROACH c Although a constant workforce is also maintained in plan 2, it is set low enough to meet demand only in March, the lowest demand-per-day month. To produce 38 units per day (800/21) in-house, 7.6 workers are needed. (You can think of this as 7 full-time workers and 1
Farnsworth Tire Company would like to develop an aggregate plan via the transportation method.Data that relate to production, demand, capacity, and cost at its West Virginia plant are shown in Table 13.6APPROACH c Solve the aggregate planning problem by minimizing the costs of matching production
Klasson and Avalon, a medium-sized Tampa law firm of 32 legal professionals, wants to develop an aggregate plan for the next quarter. The firm has developed 3 forecasts of billable hours for the next quarter for each of 5 categories of legal business it performs (column 1, Table 13.8). The 3
The Cleveland Downtown Inn is a 100-room hotel that has historically charged one set price for its rooms, $150 per night. The variable cost of a room being occupied is low. Management believes the cleaning, air-conditioning, and incidental costs of soap, shampoo, and so forth, are $15 per room per
1. Define sales and operations planning.
2. Why are S&OP teams typically cross-functional?
3. Define aggregate planning.
6. Define chase strategy.
11. What is the relationship between the aggregate plan and the master production schedule?
12. Why are graphical aggregate planning methods useful?
13. What are major limitations of using the transportation method for aggregate planning?
14. What is revenue management? Provide examples of industries where revenue management is popular
• • • 13.3 The president of Hill Enterprises, Terri Hill, projects the firm’s aggregate demand requirements over the next 8 months as follows:Her operations manager is considering a new plan, which begins in January with 200 units on hand. Stockout cost of lost sales is $100 per unit.
• • • 13.7 Consuelo Chua, Inc., is a disk drive manufacturer in need of an aggregate plan for July through December. The company has gathered the following data:What will each of the two following strategies cost?a) Vary the workforce so that production meets demand. Chua had eight workers on
• • 13.8 You manage a consulting firm down the street from Consuelo Chua, Inc., and to get your foot in the door, you have told Ms. Chua (see Problem 13.7) that you can do a better job at aggregate planning than her current staff. She said, “Fine.You do that, and you have a 1-year
• • • 13.10 Using the data in Problem 13.9, prepare the following two plans. Compare Plans C and D with Plans A and B and make a recommendation.◆ Plan C – A chase plan. Assume the current workforce at 20 workers and productivity at 100 units per worker per month. Hiring cost is 500 Yuan
• • • 13.12 Southeast Soda Pop, Inc., has a new fruit drink for which it has high hopes. John Mittenthal, the production planner, has assembled the following cost data and demand forecastJohn’s job is to develop an aggregate plan. The three initial options he wants to evaluate are:◆ Plan
• • 13.13 Ram Roy’s firm has developed the following supply, demand, cost, and inventory data. Allocate production capacity to meet demand at a minimum cost using the transportation method.What is the cost? Assume that the initial inventory has no holding cost in the first period and
• • 13.15 The production planning period for mobile boards at Sime Factory, Egypt, is 4 months. Cost data are as follows:For each of the next 4 months, capacity and demand data for boards are as follows:Develop a production plan that minimizes costs using the transportation method. Assume
• • 13.16 The production planning period for knobs at Al-Arabi Factory, Egypt, is 6 months. Cost data is as follows:For each of the next 6 months, capacity and demand data for knobs are as followsDevelop a production plan that minimizes costs using the transportation method. Subcontracting is
• • • 13.18 José Martinez of El Paso has developed a polished stainless steel tortilla machine that makes it a “showpiece” for display in Mexican restaurants. He needs to develop a 5-month aggregate plan. His forecast of capacity and demand follows:Assume that backorders are not
•••• 13.19 The manufacturer of outdoor paints at Jebel Ali, Dubai, has collected the following information regarding the capacities (in units) and demand forecast for the next 9 monthsa) Develop a chase plan to meet the monthly demand using regular-time production, overtime, and
• • 13.24 Refer to the CPA firm in Problem 13.23. In planning for next year, Cohen estimates that billable hours will increase by 10% in each of the 6 months. He therefore proceeds to hire a fifth CPA. The same regular time, overtime, and outside consultant(i.e., Forrester) costs still apply.a)
1. Evaluate the various configurations of operating and closed plants that will meet weekly demand. Determine which configuration minimizes total costs.Andrew-Carter, Inc. (A-C), is a major Canadian producer and distributor of outdoor lighting fixtures. Its products are distributed throughout South
2. Discuss the implications of closing a plant.Andrew-Carter, Inc. (A-C), is a major Canadian producer and distributor of outdoor lighting fixtures. Its products are distributed throughout South and North America and have been in high demand for several years. The company operates three plants to
1. After researching revenue (yield) management in airlines, describe how the Magic system differs from that of American or other airline carriers.Revenue management was once the exclusive domain of the airline industry. But it has since spread its wings into the hotel business, auto rentals, and
2. The Magic used its original pricing systems of several years ago and set the price for a Terrace V, Zone 103 seat at $68 per game.There were 230 such seats not purchased as part of season ticket packages and thus available to the public. If the team switched to the 7-price dynamic system
3. What are some concerns the team needs to consider when using dynamic pricing with frequent changes in price?Revenue management was once the exclusive domain of the airline industry. But it has since spread its wings into the hotel business, auto rentals, and now even professional sports, with
LO 13.1 The outputs from an S&OP process are:a) long-run plans.b) detail schedules.c) aggregate plans.d) revenue management plans.e) short-run plans.
LO 13.2 Aggregate planning is concerned with determining the quantity and timing of production in the:a) short term.b) intermediate term.c) long term.d) all of the above.
LO 13.6 Revenue management requires management to deal with:a) multiple pricing structures.b) changes in demand.c) forecasts of use.d) forecasts of duration of use.e) all of the above.
LO 12.7 The appropriate level of safety stock is typically determined by:a) minimizing an expected stockout cost.b) choosing the level of safety stock that assures a given service level.c) carrying sufficient safety stock so as to eliminate all stockouts.d) annual demand.
LO 12.6 The EOQ model with quantity discounts attempts to determine:a) the lowest amount of inventory necessary to satisfy a certain service level.b) the lowest purchase price.c) whether to use a fixed-quantity or fixed-period order policy.d) how many units should be ordered.e) the shortest lead
LO 12.4 Extra units in inventory to help reduce stockouts are called:a) reorder point.b) safety stock.c) just-in-time inventory.d) all of the above.
LO 12.2 Cycle counting:a) provides a measure of inventory turnover.b) assumes that all inventory records must be verified with the same frequency.c) is a process by which inventory records are periodically verified.d) all of the above.
LO 12.1 ABC analysis divides on-hand inventory into three classes, based on:a) unit price.b) the number of units on hand.c) annual demand.d) annual dollar values.
3. How would you go about implementing these suggestions? Controlling inventory is one of Wheeled Coach’s toughest problems. Operating according to a strategy of mass customization and responsiveness, management knows that success is dependent on tight inventory control. Anything else results in
2. If you were to take over as inventory control manager at Wheeled Coach, what additional policies and techniques would you initiate to ensure accurate inventory records? Controlling inventory is one of Wheeled Coach’s toughest problems. Operating according to a strategy of mass customization
1. Explain how Wheeled Coach implements ABC analysis. Controlling inventory is one of Wheeled Coach’s toughest problems. Operating according to a strategy of mass customization and responsiveness, management knows that success is dependent on tight inventory control. Anything else results in an
7. Why doesn’t Frito-Lay make all its 41 products at each of its plants? Frito-Lay has flourished since its origin—the 1931 purchase of a small San Antonio firm for $100 that included a recipe, 19 retail accounts, and a hand-operated potato ricer. The multi-billion- dollar company,
6. Why does the company keep so many plants open? Frito-Lay has flourished since its origin—the 1931 purchase of a small San Antonio firm for $100 that included a recipe, 19 retail accounts, and a hand-operated potato ricer. The multi-billion- dollar company, headquartered in Dallas, now has 41
5. Why does inventory flow so quickly through a Frito-Lay plant? Frito-Lay has flourished since its origin—the 1931 purchase of a small San Antonio firm for $100 that included a recipe, 19 retail accounts, and a hand-operated potato ricer. The multi-billion- dollar company, headquartered in
4. How would you rank the dollar investment in each of the four types (from the most investment to the least investment)? Frito-Lay has flourished since its origin—the 1931 purchase of a small San Antonio firm for $100 that included a recipe, 19 retail accounts, and a hand-operated potato ricer.
3. What are the four types of inventory? Give an example of each at Frito-Lay. Frito-Lay has flourished since its origin—the 1931 purchase of a small San Antonio firm for $100 that included a recipe, 19 retail accounts, and a hand-operated potato ricer. The multi-billion- dollar company,
2. What are the major inventory items at Frito-Lay, and how rapidly do they move through the process? Frito-Lay has flourished since its origin—the 1931 purchase of a small San Antonio firm for $100 that included a recipe, 19 retail accounts, and a hand-operated potato ricer. The multi-billion-
1. How does the mix of Frito-Lay’s inventory differ from those at a machine or cabinet shop (a process-focused facility)? Frito-Lay has flourished since its origin—the 1931 purchase of a small San Antonio firm for $100 that included a recipe, 19 retail accounts, and a hand-operated potato
2. Discuss ROPs and total costs.Zhou Bicycle Company (ZBC), located in Seattle, is a wholesale distributor of bicycles and bicycle parts. Formed in 1981 by University of Washington Professor Yong-Pin Zhou, the firm’s primary retail outlets are located within a 400-mile radius of the distribution
1. Develop an inventory plan to help ZBC.Zhou Bicycle Company (ZBC), located in Seattle, is a wholesale distributor of bicycles and bicycle parts. Formed in 1981 by University of Washington Professor Yong-Pin Zhou, the firm’s primary retail outlets are located within a 400-mile radius of the

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