Exam 10: Supply Chain Design

Champion Cooling Company remanufactures window air conditioners during the off-season months for sales during the scorching months of June,July,and August in the Oklahoma City area.Their average inventory of air conditioners is shown in the following table.The company operates 50 weeks a year and has average weekly sales of $3,750 and expects to sell $135,000 worth of product in a year. a.What is their average aggregate inventory value? b.What is their total inventory (measured as weeks of supply)? c.What is their inventory turnover?

While it is important to manufacturing firms,little can be done to improve supply chain strategy in most service organizations.

The best inventory level,when expressed as a turnover,is 52 per year.

Cornelius Controlfreak insisted that his manufacturing plant also be the sole location for all finished goods inventory.If any customer placed an order,they knew it would come from the only place on Earth that had a ready supply,Cornelius' plant warehouse.________ was alive and well thanks to this approach.

In ________,the product is built to customer specifications from a stock of existing components.

Discuss the major differences between supply chains for services and manufacturing.Which supply chain is easier to coordinate effectively?

Use the following scenario to answer the questions below. A company is considering making versus buying a part needed for manufacturing.Particulars are as follows: -Refer to the instruction above.For an annual volume of 3,000 units,which supplier should be chosen?

Which one of the following statements on inventory placement of finished goods is best?

The type of goods for which a responsive supply chain is appropriate are:

Responsive supply chains should be preferred when:

Efficient supply chains use low capacity cushions.

There was no reason to build a new call center and hire hundreds of customer service representatives when there were perfectly viable options thousands of miles away.Hence,the company decided to ________ this process.

An efficient supply chain typically has:

________ is the money used to finance ongoing operations.

Responsive supply chains work best when firms offer a low variety of services or products and demand predictability is high.

Use the following scenario to answer the questions below. You currently make a part on old equipment at a cost of $50,000 per year and a variable cost of $20 / unit.You have found an outside supplier who will make the part for $15 / unit if you will pay their annual fixed costs of $200,000 / year.The following table summarizes the details of this make versus buy decision. -Refer to the instruction above.What are total costs to buy an annual quantity of 40,000 units?

The average inventory at Hamilton Industries,comprising raw materials,work-in-process,and finished goods,was found to be $17.2 million last year.If the cost of goods sold per week averaged $1.32 million,what was the inventory turnover experienced by Hamilton Industries? Assume the company had 50 working weeks per year.

When a company uses ________ ,it is moving upstream in the supply chain toward the source of raw materials.

Use the following scenario to answer the questions below. A company must decide if it will make or buy an item it needs.The company can make the item for $10 / unit,but must spend $15,000 per year in tooling to do so.An outside firm has quoted a total price of $12 / unit to supply the quantity required. -Refer to the instruction above.What is the break-even point in this situation?

A television manufacturer would like to reduce its inventory.To this end,you are asked by the operations manager to assess its inventory level.You have the following information on average inventories from last year's financial statement: Raw materials $1,500,000 Work-in-process $1,200,000 Finished goods $800,000 In addition,the cost of goods sold last year (50 weeks)was $20 million. a.What is its total inventory (measured as weeks of supply)? b.What is its inventory turnover?