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business
supply chain management 2nd
Supply Chain Management Strategy Planning And Operation 3rd Edition Sunil Chopra, Peter Meindl - Solutions
Return to the bicycle manufacturer NatBike in Exercise 6.Assume that the plant has a capacity of 20,000 bicycles. If additional capacity can be added at a cost of $25 per bicycle, how should NatBike price to each of the two segments and how much capacity should it add? How are profits affected
Return to the bicycle mant_Ifacturer NatBike in Exercise 6.Now assume that a customized bicycle costs $300 to manufacture, whereas a standardized bicycle costs $200 to manufacture, with all other data as in Exercise 6.What price should NatBike charge each segment if there is no capacity constraint?
NatBike, a bicycle manufacturer, has identified two customer segments, one that prefers a customized bicycle and is willing to pay a higher price and another that is willing to take a standardized bicycle but is more price sensitive. Assume that the cost of manufacturing either bicycle is $200.
The manager at a large manufacturer is planning warehousing needs for the coming year.She predicts that warehousing needs will be normally distributed, with a mean of 500,000 square feet and a standard deviation of 150,000. The manager can obtain a full-year lease at$0.50 per square foot per month
A trucking firm has current capacity of 200,000 cubic feet. A large manufacturer is willing to purchase the entire capacity at $0.10 per cubic foot per day. The manager at the trucking firm has observed that on the spot market, trucking capacity sells for an average of $0.13 per cubic foot per day.
A small warehouse has 100,000 square feet of capacity. The manager at the warehouse is in the process of signing contracts for storage space with customers. The contract has an upfront monthly fee of $200 per customer and then a fee of $3 per square foot based on actual usage. The warehouse
The GoGo Bunny is a very hot toy this Christmas, and the manufacturer has decided to ration supply to all retailers. A large retail chain owns two channels-a discount channel and·a high-service channel. The retailer plans to sell the toy at a margin of $4 in the discount channel and a margin of $8
Felgas, a manufacturer of felt gaskets, has production capacity of 1,000 units per day.Currently, the firm sells production capacity for $5 per unit. At this price, all production capacity gets booked about one week in advance. A group of customers have said that they would be willing to pay twice
How can a golf course use revenue management to improve financial performance?
Demand for hairdressers is much higher over the weekend, when people are not at work.What revenue management techniques can be used by such a business?
Explain the use of outlet stores by retailers such as Saks Fifth Avenue in the context of revenue management. How does the presence of outlet stores help Saks? How does it help its more valuable customer, who is willing to pay full price?
What revenue management opportunities are available to the owner of a warehouse and how can it take advantage of them?
What revenue management opportunities are available to a trucking firm? How can it take advantage of these opportunities?
What revenue management opportunities are available to a manufacturer? How can it take advantage of these opportunities?
In what ways can a retailer such as Nordstrom take advantage of revenue management opportunities?
Describe trade-offs that must be considered when making revenue management decisions.
Identify conditions under which revenue management tactics can be effective.
Understand the role of revenue management in a supply chain.
Imagine that you have acquired both the retailer and manufacturer discussed in Exercise 14-7.Your interests now are in maximizing profitability for your new firm and in setting up an incentive system to make this happen. You have chosen to keep the quantity flexibility contract in place to provide
Consider the retailer's position in the quantity flexibility contract problem discussed in the chapter with results in Table 14-6. Consider the base contract one in which a = 13 = 0.2, the order size is 1,000, and the wholesale price is $6. For the following questions, you will need to build a
In Exercise 14-5, imagine that you have chosen Reliable as your supplier. Value Electric very much wants your business and offers you the choice of three mutually exclusive alternatives:a reduced lead time of 1 week, a reduced minimum batch of 800, or a reduction in standard deviation of lead time
You are a purchasing manager for a large electric utility in charge of stocking a certain type of transformer. Weekly demand among your field crews for these transformers is normally distributed, with a mean of 100 and a standard deviation of 50.Holding costs are 25%, and you must hold a level of
Benetton has entered into a quantity flexibility contract with a retailer for a seasonal product. If the retailer orders 0 units, Benetton is willing to provide up to another 35 percent if needed. Benettmi's production cost is $20, and it charges the retailer a wholesale price of$36. The retailer
Topgun Records and several movie studios have decided to sign a revenue-sharing contract for CDs. Each CD costs the studio $2 to produce. The CD will be sold to Topgun for $3.Topgun in turn prices a CD at $15 and forecasts demand to be normally distributed, with a mean of 5,000 and a standard
A movie studio sells the latest movie on DVD to Blockbuster at $10 per DVD. The marginal production cost for the movie studio is $1 per DVD. Blockbuster prices each DVD at $19.99 to its customers. DVDs are kept on the regular rack for a one-month period, after which they are discounted down to
A publisher sells books to Borders at $12 each. The marginal production cost for the publisher is $1 per book. Borders prices the book to its customers at $24 and expects demand over the next two months to be normally distributed, with a mean of 20,000 and a standard deviation of 5,000. Borders
How can design collaboration with suppliers help a PC manufacturer improve performance?
An auto manufacturer sources both office supplies and subsystems such as seats. What, if any, difference in sourcing strategy would you recommend for the two types of products?
Most firms offer their sales force monetary incentives based on exceeding a specified target.What are some pros and cons of this approach? How would you modify these contracts to rectify some of the problems?
For a manufacturer that sells to many retailers, why does a quantity flexibility contract result in less information distortion than a buy-back contract?
Explain why, for the same inventory level, a revenue-sharing contract results in a lower sales effort from the retailer than if the retailer has paid for the product and is responsible for all remaining inventory.
How can a supplier with a lower price end up costing the buyer more than a supplier with a higher price?
What factors lead Wal-Mart to own its trucks although many retailers outsource all their transportation?
What are some ways that a firm such as Wal-Mart benefits from good sourcing decisions?
How will the contract influence supplier performance along key performance measures?
Will the incentives in the contract introduce any information distortion?
How will the contract affect the firm's profits and total supply chain profits?
Categorize purchased products and services and identify the desired focus of procurement in each case.
Describe the impact of different contracts on supplier performance and information distortion.
Structure successful auctions and negotiations.
Identify dimensions of supplier performance that affect total cost.
Discuss factors that affect the decision to outsource a supply chain function.
Understand the role of sourcing in a supply chain.
Books-On-Line, an online bookseller, charges its customers a shipping charge of $4 for the first book and $1 for each additional book. The average customer order contains four books. BooksOn-Line currently has one warehouse in Seattle and ships all orders from there. For shipping purposes,
A power plant in California uses coal at the rate of 100,000 pounds each day. It also uses MRO material at the rate of 1,000 pounds each day. The coal comes from Wyoming and the MRO material comes from Chicago. Coal costs $0.01 per pound, whereas MRO material costs $10 per pound, on average.
Discuss key drivers that may be used to tailor transportation. How does tailoring help?
Do you expect aggregation of inventory at one location to be more effective when a company such as Dell sells computers or when a company such as Amazon.com sells books?Explain by considering transportation and inventory costs.
What transportation challenges does Peapod face? Compare transportation costs at online grocers and supermarket chains.
Compare the transportation costs for an e-business such as Amazon.com and a retailer such as Home Depot when selling home-improvement materials.
Wal-Mart designs its networks so that a DC supports several large retail stores. Explain how the company can use such a network to reduce transportation costs while replenishing inventories frequently.
Why is it important to account for congestion when pricing the use of transportation infrastructure?
What modes of transportation are best suited for large, low-value shipments? Why?
Identify trade-offs that shippers must consider when designing a transportation network.
Identify the relative strengths and weaknesses of various transportation network design options.
Discuss the role of infrastructure and policies in transportation.
Evaluate the strengths and weaknesses of different modes of transportation.
Understand the role of transportation in a supply chain.
An electronics manufacturer has outsourced production of its latest MP3 players to a contract manufacturer in Asia. Demand for the players has exceeded all expectations, whereas the contract manufacturer has limited production capacity. The electronics manufacturer sells three types of players-a
A publisher is printing calendars for the coming year. Demand for calendars is normally distributed, with a mean of 70,000 and a standard deviation of 25,000. The cost per calendar is$3, and they are sold for $10 each. All unsold calendars are recycled at the end of January.(a) How many calendars
A designer is planning orders for its annual limited-edition ornament. Demand has been forecast to be normally distributed, with a mean of 20,000 and a standard deviation of 8,000.Each ornament costs $30 and is sold for $95. All unsold ornaments are destroyed at the end of the season, to ensure the
The Knitting Company (TKC) is planning production for its four styles that are popular during Christmas. All four styles have demand that is normally distributed. The best-selling style has an expected demand of 30,000 and a standard deviation of 5,000. Each of the other three styles has an
Lake Grove Confectionaries (LGC) sells chocolates for the holiday season in specially designed boxes. The firm sells four different designs, and currently all packaging is done in the plant as chocolates are manufactured. All manufacturing and packaging for the holiday season is completed before
Daily demand for aspirin at Door Red Pharmacy is normally distributed, with a mean of 40 bottles and a standard deviation of 5: The replenishment lead time from the supplier is one day. The current inventory policy at DoorRed is to order 200 bottles when the quantity on hand drops below 45.Each
Sport Obermeyer (SO) is a manufacturer of Ski Apparel. A ski jacket is sourced at a cost of$80 and sold for $125. One order is placed at the beginning of the season. Currently, SO disposes of any unsold jackets at the end of the season to outlet stores at $70. It costs $10 to hold a jacket in
The Highland Company (THC) is planning orders for its winter catalog. One order is to be placed at the beginning of the season. The demand forecast for one of its jackets is normal, with a mean of 5,000 and standard deviation of 2,000. Each jacket is purchased for $100, and any unsold jackets at
A major fast-food company is running a promotion for children's meals for which they offer a Sharky toy. A single order will be placed for the toys. Each toy costs $0.50, and any unsold toys will have to be scrapped at the end of the promotion. The margin from each meal(including the toy) is $1.00,
The manager at AnyLogo is considering the purchase of high-speed embroidery machines tnat will allow it to embroider on demand. In this case, the apparel will be made in Sri Lanka without any logo; the logo embroidery will be postponed and will be done in the United States on demand. This will
Any Logo supplies firms with apparel containing their logo to be used for promotional purposes. Any Logo has four major customers-IBM, AT&T, HP, and Cisco. During the holiday season, the logos are adorned with a Christmas motif. Demand from each firm for apparel with the Christmas motif is normally
Snoblo, a manufacturer of snow blowers, sells four models. The base model, Reguplo, has demand that is normally distributed, with a mean of 10,000 and a standard deviation of 1,000. The three other models have additional features, and each has demand that is normally distributed, with a mean of
Champion manufactures winter fleece jackets for sale in the United States. Demand for jackets during the season is normally distributed, with a mean of 20,000 and a standard deviation of 10,000. Each jacket sells for $60 and costs $30 to produce. Any leftover jackets at the end of the season are
The manager at Goodstone Tires, a distributor of tires in Illinois, uses a continuous review policy to manage inventory. The manager currently orders 10,000 tires when the inventory of tires drops to 6,000. Weekly demand for tires is normally distributed, with a mean of 2,000 and a standard
The general manager at Green Thumb decides to conduct extensive market research for its new product. At the end of the market research, the manager estimates demand to be normally distributed, with a mean of f.l. = 100 and a standard deviation of cr = 15.How should Green Thumb alter its production
Green Thumb, a manufacturer of lawn care equipment, has introduced a new product. Each unit costs $150 to manufacture, and the introductory price is to be $200. At this price, the anticipated demand is normally distributed, with a mean of f.l. = 100 and a standard deviation of cr = 40.Any unsold
Discuss how an expensive supplier with short lead times who is used as a backup for a lowcost supplier with long lead times can result in higher profits than using only the low-cost supplier.
Mattei has historically allowed toy retailers to place two orders for the holiday shopping season. Mattei is considering allowing retailers to place only one order. What impact will this have on retailer orders? What impact will this have on supply chain profits?
How can postponement of product differentiation be used to improve supply chain profitability?
A firm improves its forecast accuracy using better market intelligence. What impact will this have on supply chain inventories and profitability? Why?
Consider two products with the same margin carried by a retail store. Any leftover units of one product are worthless. Leftover units of the other product can be sold to outlet stores.Which product should have a higher level of availability? Why?
Consider two products with the same cost but different margins. Which product should have a higher level of product availability? Why?
Use managerial levers that improve supply chain profitability through optimal service levels.
Identify the factors affecting the optimal level of product availability and evaluate the optimal cycle service level.
Orion is a global company that sells copiers. Orion currently sells 10 variants of a copier, with all inventory kept in finished-goods form. The primary component that differentiates the copiers is the printing subassembly. An idea being discussed is to introduce commonality in the printing
Toyota has decided to set up regional warehouses where some variants of the Scion will be customized and shipped to dealers on demand. Customizing and shipping on demand will raise production and transportation cost per car by $100. Each car costs $20,000, and Toyota has a holding cost of 20
The Door Red pharmacy has 25 retail outlets in the Chicago region. The current policy is to carry every drug in each retail outlet. Door Red is investigating the possibility of centralizing some of the drugs in one central location. Delivery charge would increase by $0.02 per unit if a drug were
_Return to the Door Red Pharmacy in Exercis 12.For the drug under discussion, Door Red wants to adjust its reorder point from 750 to achieve a fill rate of 99.9 percent. What reorder point should it use?
Door Red Pharmacy replenishes one of its best-selling drugs using a continuous review policy. Daily demand for the drug is normally distributed, with a mean of 300 and a standard deviation of 100.The wholesaler can process a replenishment request in 2 days. The current replenishment policy is to
Return to the problem data in Exercise 10.Assume that Motorola follows a periodic review policy. Given lot sizes by sea and air, Motorola would have to place an order every 20 days using sea transport but could order daily using air transport.(a) Assume that Motorola follows a periodic review
Motorola obtains cell phones from its contract manufacturer located in China to serve the U.S. market. The U.S. market is served from a warehouse located in Memphis, Tennessee.Daily demand at the Memphis warehouse is normally distributed, with a mean of 5,000 and a standard deviation of 4,000. The
Return to the Epson data in Exercise 7.Each printer costs Epson $200, and the holding cost is 25 percent. What saving in holding cost can Epson expect as a result of building the European DC? If final assembly in the European DC adds $5 to the production cost of each printer, would you recommend
Epson produces printers for sale in Europe in its Taiwan factory. Printers sold in different countries differ in terms of the power outlet as well as the language of the manuals.Currently, Epson assembles and packs printers for sale in individual countries. The distribution of weekly demand in
The Gap has started selling through its online channel along with its retail stores. Management has to decide which products to carry at the retail stores and which products to carry at a central warehouse to be sold only via the online channel. The Gap currently has 900 retail stores in the United
Return to the Sam's Club store in Exercise 4.Assume that the supply lead time from HP is normally distributed, with a mean of 2 weeks and a standard deviation of 1.5 weeks. How much safety inventory should Sam's Club carry if it wants to provide a CSL of 95 percent?How does the required safety
Weekly demand for HP printers at a Sam's Club store is normally distributed, with a mean of 250 and a standard deviation of 150.The store manager continuously monitors inventory and currently orders 1,000 printers each time the inventory drops to 600 printers. HP currently takes two weeks to fill
Assume that the Best Buy store in Exercise 1 has a policy of ordering cell phones from Motorola in lots of 500.Weekly demand for Motorola cell phones at the store is normally distributed, with a mean of 300 and a standard deviation of 200.Motorola takes two weeks to supply an order. If the store
Reconsider the Best Buy store in Exercise 1.The store manager has decided to follow a perio~iic review policy to manage inventory of cell phones. She plans to order every three weeks.Given a desired CSL of 95 percent, how much safety inventory should the store carry? What should its OUL be?
Weekly demand for Motorola cell phones at a Best Buy store is normally distributed, with a mean of 300 and a standard deviation of 200.Motorola takes two weeks to supply a Best Buy order. Best Buy is targeting a CSL of 95 percent and monitors its inventory continuously.How much safety inventory of
A new technology allows books to be printed in ten minutes. Borders has decided to purchase these machines for each store. They must decide which books to carry in stock and which books to print on demand using this technology. Do you recommend it for best-sellers or for other books? Why?
In the 1980s, paint was sold by color and size in paint stores. Today, paint is mixed at the paint store according to the color required. Discuss what, if any, impact this change has on safety inventories in the supply chain.
Why is Amazon.com able to provide a large variety of books and music with less safety inventory than a bookstore chain selling through retail stores?
Why can a Home Depot with a few large stores provide a higher level of product availability with lower inventories than a hardware store chain such as Tru-Value, with many small stores?
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