Exam 12: Supply Chain Design

Scenario 12.1 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. -Use Scenario 12.1 to answer the question.What are total costs to make a quantity of 40,000 units per year?

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:

Scenario 12.1 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. -Use Scenario 12.1 to answer the question.What are total costs to buy an annual quantity of 40,000 units?

Efficient supply chains work best when contribution margins are high.

The VP of Finance studied the printing costs at the university and knew it was time for bold,decisive action.The annual fixed cost of printing at the school was $850,000 and the per-page cost was one cent.Fortunately,his brother-in-law happened to own a company that would lease the printers to the university for only $600,000.The only issue to be decided was what the per-page cost would be for the leased printers.On average,the university had been printing about 10,000,000 pages per year.What would a break-even per-page printing cost be given the average printing volume?

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:

What is mass customization and what advantages does a producer benefit from if they can realize it?

Scenario 12.1 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. -Use Scenario 12.1 to answer the question.For what range of output would you prefer to buy?

The VP of Finance studied the printing costs at the university and knew it was time for bold,decisive action.The annual fixed cost of printing at the school was $850,000 and the per-page cost was two cents.Fortunately,his brother-in-law happened to own a company that would lease the printers to the university for only $600,000 and charge ten cents per page.At what point would the university be indifferent between owning their printers and leasing their printers?

Scenario 12.1 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. -Use Scenario 12.1 to answer the question.What is the break even quantity between buying and making?

An efficient supply chain typically has:

________ is essentially standardization in chunks.

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

The finished goods of one firm may actually be the raw materials for another firm.

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

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.

Responsive supply chains should be preferred when:

Which one of the following is TRUE for supply chain management?

Scenario 12.1 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. -Use Scenario 12.1 to answer the question.For what range of output would you prefer to make?

Compare and contrast efficient versus responsive supply chains.