Homework answers / question archive / Operations Analysis Q 1a (2 Pts): As a supply chain management individual, what factors would you consider when implementing ERP software? What steps would you follow when selecting an ERP vendor?           Q1b (1 Pts): What are the hidden costs in the ERP implementation? Explain one of the hidden costs

Operations Analysis Q 1a (2 Pts): As a supply chain management individual, what factors would you consider when implementing ERP software? What steps would you follow when selecting an ERP vendor?           Q1b (1 Pts): What are the hidden costs in the ERP implementation? Explain one of the hidden costs

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Operations Analysis

Q 1a (2 Pts): As a supply chain management individual, what factors would you consider when implementing ERP software? What steps would you follow when selecting an ERP vendor?

 

 

 

 

 

Q1b (1 Pts): What are the hidden costs in the ERP implementation? Explain one of the hidden costs.

 

 

 

 

 

Q2 (1 Pts): Consider two products with the same cost but different margins. Which product should have higher customer service level? Why?

 

 

 

 

 

 

Q3a (2 pts): An automotive seat manufacturer uses on an average 40 units of spring steel every week, with a standard deviation of usage of 5. Every time company places an order with its vendor, it costs them $600. To hold one unit of steel in inventory for a year costs them $ 12. The lead time for delivery of an order is 7 weeks. Unit cost is $100. Due to limitations on the storage space, company can store only 200 units of the spring steel at any point in time. However, management is willing to pay for the additional storage. How much annually would they need to pay for this extra storage? Would you recommend paying for the extra storage? Explain your answer. (Note: Assume 5 working days per week and 260 working days per year)

 

 

 

 

 

 

 

 

 

 

 

 

Q3b (2 pts): In the above problem 3a, the company is willing to take 5% risk of a stock out by setting up a reorder point. What should be the reorder point?

 

 

 

 

 

 

Q4 (1 Pts) What are the two primary outputs of the MRP? Briefly explain the two outputs.

 

 

 

 

 

Q5 (1 Pts) Explain ‘Inventory Turnover’ KPI. Is high or low value desired for Inventory Turnover? Why?

 

 

 

Q5b (2 Pts) A computer company reported following information in the last fiscal year. (all amounts in millions). Calculate Inventory Turns. What can you say about the performance of this company based inventory turns.

Net Revenue	$18243
Cost of Goods Sold	$14137
Average Raw Material on Hand	$234
Average Finished Goods & Work In Progress Inventory	$39
Product Material Days of Supply	6 days

 

 

 

 

 

 

Q6 (2 Pts) What is the purpose of carrying safety stock? Under what circumstances would you carry high/low safety stock?

 

 

 

 

 

 

Q7 (2 Pts) What are the different pricing strategies that firm can use to change demand pattern?

 

 

 

 

 

 

 

Q8 (2 Pts) The price change decisions in a supply chain are solely decided by a retailer. True or False? Explain your answer briefly.

What is the impact on profit and inventory by running a promotion in the peak demand periods vs. low demand period?

 

 

 

 

 

 

Q9 (1 Pts) What are the shortcomings of MRP? Why MRP II was needed?

 

 

 

 

 

 

Q10 (2 Pts) Briefly explain the costs associated with EOQ model. If production cost goes up, what is the impact on the EOQ quantity?

 

 

 

 

 

 

 

 

 

Q11a (1 Pts) Under which circumstances would you use single period/newsboy model for inventory management?

 

 

 

 

 

 

Q11b (2 Pts) A hotel near the university always fills up on the evening before football games. History has shown that when the hotel is fully booked, the number of last minutes cancellation has a mean of 5 and standard deviation of 3.3 The average room rate is $80. When hotel is overbooked, policy is to find a room in a nearby hotel and to pay for the room for the customer. This costs the hotel approx. $ 130. How many rooms should the hotel overbook? Assume normal distribution. Show your work.

 

 

 

 

 

 

 

 

 

 

 

Q12 (2 Pts) What is Bullwhip effect? How does it impact performance of a supply chain?

 

 

 

 

 

 

 

 

 

Q13a (1 Pts): How would you adjust MPS schedule when safety stock requirements are given?

 

 

 

 

Q13b (3 Pts): Prepare a master production schedule with the information given as follows. The forecast for each week of am eight week schedule is 50 units. The MPS rule is to schedule production if the projected on hand inventory would be negative without it. Customer orders are as follows. Production lot size is 75, safety stock is 10 and no beginning on hand inventory. Calculate available to promise (ATP) quantity for each period.

 

Week	Customer Orders
1	52
2	35
3	20
4	12

 

Period
Forecast
Cust.Ord.
SS
Proj. OH
MPS
ATP

 

 

Q14 (2 Pts) Choose the correct CPFR strategy from options a,b,c,d below.

Industry Application	Applicable CPFR Strategy
Honeywell Thermostat planning at Lowes
Sony planning PS for Online only retailer
P&G Planning a promotion on Tide at Target
Zara planning winter coats styles, colors & Sizes

 

(a) Assortment Planning Collaboration

(b) Retail event collaboration

(c) Store Replenishment Collaboration

(d) DC Replenishment Collaboration

 

15 (3 Pts) A cable company needs to stock universal remote devices. They expect annual demand to be 1000 and ordering cost is $50. The annual holding cost is 25% of the unit price per unit. In addition, supplier has provided below price schedule. How much quantity would you order to minimize the cost? Show calculations to justify your answer.

 

Quantity	Unit Price
1-200	$15.00
201 - 399	$14.00

*Note: Q3a and 3b not solved.