Question: Service Management: Operations, Strategy, Information Technology , 8th edition Excise15.6 SpanishInteriorsimportsceramicfloortilesfromMexicowithvariouspatternsinanticipationofcontractorneeds.Thesetilesusuallyareorderedayearbefore delivery,andtheproductionrunforeachtilepatternrequiresaseparatesetup.Therefore,theordersmustbelargetodefraythesetupcost.Becauseordersaremadefarinadvanceofcustomerneeds,thecompanymustguesswhatthecontractorswilllikeandorderpatternsinanticipationofthesedemands.Occasionally,tilepatternsfalloutoffavor,andSpanishInteriorsisstuckwithslowmovingstock.Themark-upis30percentofthetilecost,andtheinventoryusuallyturnsoveraboutthreetimesperyear.Therearetwoslowmovingtilepatternsinstockthatmanagementestimateswilltake2yearseachtoclear.Thesunburstpatterncurrentlyretailsfor$0.70persquareandthesaguarocactuspatternfor$1.05persquare. Calculatethelowestdiscountpriceforeachpatternthatwillclearthestockquickly.

Service Management: Operations, Strategy, Information Technology , 8th edition

  1. Excise15.6
  2. SpanishInteriorsimportsceramicfloortilesfromMexicowithvariouspatternsinanticipationofcontractorneeds.Thesetilesusuallyareorderedayearbefore delivery,andtheproductionrunforeachtilepatternrequiresaseparatesetup.Therefore,theordersmustbelargetodefraythesetupcost.Becauseordersaremadefarinadvanceofcustomerneeds,thecompanymustguesswhatthecontractorswilllikeandorderpatternsinanticipationofthesedemands.Occasionally,tilepatternsfalloutoffavor,andSpanishInteriorsisstuckwithslowmovingstock.Themark-upis30percentofthetilecost,andtheinventoryusuallyturnsoveraboutthreetimesperyear.Therearetwoslowmovingtilepatternsinstockthatmanagementestimateswilltake2yearseachtoclear.Thesunburstpatterncurrentlyretailsfor$0.70persquareandthesaguarocactuspatternfor$1.05persquare.
  3. Calculatethelowestdiscountpriceforeachpatternthatwillclearthestockquickly.

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