Wingman Distributing Company is expanding its supply chain to include a new distribution hub in South Bend. A key decision involves the number of trucks for the facility. The particular model of truck Wingman is considering can be used 6,000 miles a month and will cost $1,100 a month in capital costs. In addition, each mile a truck is used costs $0.90 for maintenance. A local truck rental firm will rent trucks at a cost of $1.70 per mile, which includes the maintenance costs for those miles. Given the distribution of likely requirements for trucks, management has come up with three alternatives to consider as shown in the table. Monthly requirements (miles) Probability Fleet size (trucks) 30,000 0.20 5 60,000 0.50 10 Which fleet size will yield the lowest expected monthly costs for Wingman? A fleet size of trucks is the lowest cost alternative, with expected monthly costs to Wingman of $. (Enter your responses as integers.) O 90,000 0.30 15

Wingman Distributing Company is expanding its supply chain to include a new distribution hub in South Bend. A key decision involves the number of trucks for the facility. The particular model of truck Wingman is considering can be used 6,000 miles a month and will cost $1,100 a month in capital costs. In addition, each mile a truck is used costs $0.90 for maintenance. A local truck rental firm will rent trucks at a cost of $1.70 per mile, which includes the maintenance costs for those miles. Given the distribution of likely requirements for trucks, management has come up with three alternatives to consider as shown in the table. Monthly requirements (miles) Probability Fleet size (trucks) 30,000 0.20 5 60,000 0.50 10 Which fleet size will yield the lowest expected monthly costs for Wingman? A fleet size of trucks is the lowest cost alternative, with expected monthly costs to Wingman of $. (Enter your responses as integers.) O 90,000 0.30 15

Purchasing and Supply Chain Management

6th Edition

ISBN:9781285869681

Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

ChapterC: Cases

Section: Chapter Questions

Problem 5.1SC: Scenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing...

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Scenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing expenditures for packaging materials with Jeff Joyner. Ben was particularly disturbed about the amount spent on corrugated boxes purchased from Southeastern Corrugated. Ben said, I dont like the salesman from that company. He comes around here acting like he owns the place. He loves to tell us about his fancy car, house, and vacations. It seems to me he must be making too much money off of us! Jeff responded that he heard Southeastern Corrugated was going to ask for a price increase to cover the rising costs of raw material paper stock. Jeff further stated that Southeastern would probably ask for more than what was justified simply from rising paper stock costs. After the meeting, Ben decided he had heard enough. After all, he prided himself on being a results-oriented manager. There was no way he was going to allow that salesman to keep taking advantage of Coastal Products. Ben called Jeff and told him it was time to rebid the corrugated contract before Southeastern came in with a price increase request. Who did Jeff know that might be interested in the business? Jeff replied he had several companies in mind to include in the bidding process. These companies would surely come in at a lower price, partly because they used lower-grade boxes that would probably work well enough in Coastal Products process. Jeff also explained that these suppliers were not serious contenders for the business. Their purpose was to create competition with the bids. Ben told Jeff to make sure that Southeastern was well aware that these new suppliers were bidding on the contract. He also said to make sure the suppliers knew that price was going to be the determining factor in this quote, because he considered corrugated boxes to be a standard industry item. Is Ben Gibson acting legally? Is he acting ethically? Why or why not?
Scenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing expenditures for packaging materials with Jeff Joyner. Ben was particularly disturbed about the amount spent on corrugated boxes purchased from Southeastern Corrugated. Ben said, I dont like the salesman from that company. He comes around here acting like he owns the place. He loves to tell us about his fancy car, house, and vacations. It seems to me he must be making too much money off of us! Jeff responded that he heard Southeastern Corrugated was going to ask for a price increase to cover the rising costs of raw material paper stock. Jeff further stated that Southeastern would probably ask for more than what was justified simply from rising paper stock costs. After the meeting, Ben decided he had heard enough. After all, he prided himself on being a results-oriented manager. There was no way he was going to allow that salesman to keep taking advantage of Coastal Products. Ben called Jeff and told him it was time to rebid the corrugated contract before Southeastern came in with a price increase request. Who did Jeff know that might be interested in the business? Jeff replied he had several companies in mind to include in the bidding process. These companies would surely come in at a lower price, partly because they used lower-grade boxes that would probably work well enough in Coastal Products process. Jeff also explained that these suppliers were not serious contenders for the business. Their purpose was to create competition with the bids. Ben told Jeff to make sure that Southeastern was well aware that these new suppliers were bidding on the contract. He also said to make sure the suppliers knew that price was going to be the determining factor in this quote, because he considered corrugated boxes to be a standard industry item. As the Marketing Manager for Southeastern Corrugated, what would you do upon receiving the request for quotation from Coastal Products?
Q. Hotel California has 160 rooms. The hotel has an ample low-fare demand at the room rate of $200 per night, but the demand from the high-fare class which pays $450 per night on average, is uncertain. Table below shows the number of high-fare rooms that were booked during the past 30 days. How many rooms should Hotel California protect for high-fare customers to maximize its expected revenue? Number of high-fare rooms Frequency 0 5 1 3 2 6 3 8 4 4 5 1 6 1 7 2 Total=30
Problem 3-14 (Algo) Demand for stereo headphones and music players for joggers has caused Nina Industries to grow almost 50 percent over the past year. The number of joggers continues to expand, so Nina expects demand for headsets to also expand, because, as yet, no safety laws have been passed to prevent joggers from wearing them. Demand for the players for this year was as follows: MONTH DEMAND (UNITS) 4,150 4,25e 3,950 4, 350 4,95e 4,650 5,25e 4,850 5,35e 5,65e 6,25e 5,95e January February March Аpril Мay June July August September October November December a. Using linear regression analysis, what would you estimate demand to be for each month next year? Using a spreadsheet, follow the general format in Exhibit 3.8. (Do not round Intermedlate calculatlons. Round your answers to 2 decimal places.) Month Forecast January February March April May June July August September October November December b. To be reasonably confident of meeting demand, Nina decides to use 3 standard errors…
Problem 12-5 (Algo) Garden Varlety Flower Shop uses 810 clay pots a month. The pots are purchased at $3.30 each. Annual carrying costs per pot are estimated to be 20 percent of cost, and ordering costs are $15 per order. The manager has been using an order size of 1,750 flower pots. a.What additional annual cost is the shop incurring by staying with this order size? (Round your optimal order quantity to the nearest whole number. Round all other intermediate calculations and your final answer to 2 decimal places.) Additional annual cost b.Other than cost savings, what benefit would using the optimal order quantity yield (relative to the order size of 1,750)? (Use the rounded order quantity from Part a. Round your final answer to the nearest whole percent.) About % of the storage space would be needed.
4. In the past, Peter Kelle's tire dealership in Baton Rouge sold an average of 1,100 radials each year. In the past 2 years, 220 and 250, respectively were sold in fall, 360 and 300 in winter, 150 and 160 in spring, and 320 and 440 in summer. With a major expansion planned, Kelle projects sales next year to increase to 1,300 radials. Part 2 Based on next year's projected sales, the demand for each season is going to be (enter your responses as whole numbers): Season Demand Fall __________
Problem 16-11 (Algo) One of your Taiwanese suppliers has bid on a new line of molded plastic parts that is currently being assembled at your plant. The supplier has bid $0.10 per part, given a forecast you provided of 100,000 parts in year 1; 300,000 in year 2; and 500,000 in year 3. Shipping and handling of parts from the supplier's factory is estimated at $0.01 per unit. Additional inventory handling charges should amount to $0.003 per unit. Finally, administrative costs are estimated at $30 per month. Although your plant is able to continue producing the part, the plant would need to invest in another molding machine, which would cost $20,000. Direct materials can be purchased for $0.05 per unit. Direct labor is estimated at $0.04 per unit for wages plus a 50 percent surcharge for benefits and, indirect labor is estimated at $0.011 per unit plus 50 percent benefits. Up-front engineering and design costs will amount to $50,000. Finally, management has insisted that overhead be…
To finance a vacation in 4 years, Elsie saves $410 at the beginning of every six months in an account paying interest at 13% compounded semi dash annually. (a) What will be the balance in her account when she takes the vacation? (b) How much of the balance will be interest? (c) If she waits an additional year to start her vacation, and continues to save the same amount of money, how much more money does she have to spend? Question content area bottom Part 1 a) The balance in her account will be $ enter your response here. (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.) Part 2 b) The amount of interest will be $ enter your response here. (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.) Part 3 c) She will have an extra $ enter your response here to spend on her vacation. (Round the final answer to the nearest cent as needed. Round all…
May 77.000 Problem 4 (Regression Analysis, Service Company) Bobby Gonzales owns a catering company that prepares banquets and parties for both individual and business functions throughout the year. Gonzales business is seasonal, with a heavy schedule during the summer months and the year-end holidays and a light schedule at other times. During peak periods there are extra costs. One of the major events Gonzales' customers request is a cocktail party. He offers a standard cocktail party and has developed the following cost structure on a per person basis. Food and bevernges Labor (0.5 hour x PIO per hour) Overhead (0.5 hour x P14 per hour) Total costs per person PI5.00 5.00 7.00 P27.00 Gonzales is quite certain about his estimates of the food, beverages, and labor costs but is not as comfortable with the overhead estimate. This estimate was based on the actual data for the past 12 months presented below. These data indicate that overhead costs vary with the direct labor- hours used. The…
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1. The drug distribution company LOS PAISAS wants to build a new warehouse in Carretera a Masaya area in which they intend to store the following products: equipment and products for babies. With these products, they plan to serve a total of 10,000 pharmacies in Managua. Equipments Baby products Demand (quantity pharmacies served) 2,000 8,000 Cost per product $1,000.00 $30.00 To achieve balanced use of products, baby product must be equal to 60% of authorized product units. Additionally, the number of units requested in medical equipment must be at least 20% of the total authorized. There are a total of 10,000 pharmacies. The optimal plan needs to be determined to maximize the amount of products they must have to meet demand and maximize profits. Can you please explain it Step-by-step and typed? Thank you in advance!
Questions 2 – Capital budgeting and NPV Responsible Testing Company may buy DNA‐testing equipment A costing $60,000 now (at year 0). This equipment is expected to reduce labor costs of the clinical staff, net of all staff training expenditures, by $20,000 annually in the subsequent years following the investment. Equipment A has a useful life of 8 years and can be straight‐line‐depreciated over its years of operations. No salvage value is expected at the end. The corporate tax rate (combined federal and state) is 40% and the company’s required rate‐of‐return is 15%. (2a) Describe the company’s “investment project”. Calculate the relevant cash flows and use the NPV method to determine the attractiveness of this project. (2b) Suppose that in the second year (year 2) a more efficient and effective DNA‐testing equipment B is expected to enter the market. The new equipment costs $90,000, will have an effective operating life of 6 years, can be straight‐line‐depreciated but…