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#### Arizona State University - SCM 300 ONLINE Lab Exercise PART1)Queuing The local coffee shop has 2 employees, one takes the orders and then takes payment, and the other worker makes the coffee drinks

###### Management

Arizona State University - SCM 300

ONLINE Lab Exercise

PART1)Queuing

The local coffee shop has 2 employees, one takes the orders and then takes payment, and the other worker makes the coffee drinks. While some folks ask for a simple cup of coffee that just needs to be poured, others ask for more elaborate coffee drinks, and others order multiple drinks. On average, though, it takes a total of 1 min and 15 seconds to process a customer, take the order, make the payment, and make the drink(s). During the busiest time of the day, 7:30am to 9:30am, about 39.5 customers come in per hour:

1)    Since the two workers only service one customer at a time, they are in fact working like a single worker. What percentage of the time is this single team of workers busy?

1. What is the average time a customer waits before they place an order?

1. What is the average number of customers in the line?

1. Your company used to employ 1 computer technician, Olivia, at a cost of \$20/hour who could fix 2.9 computer problems per hour. Olivia retired.

1. While Layla gets paid significantly more per hour than Olivia, she is reducing the overall cost of this system. How much money is being saved per hour by utilizing the new technician, Layla?

# PART 2: Supply Chain Concerns

Below is an overview of how materials move through the supply chain. For each set of parties listed you’ll also see a loss or defect rate associated with that portion of the supply chain.

1. Suppliers –
2. Manufacturing –
3. Distribution –
4. Retail Store –

1. Using the calculation for damage and defects discussed in lecture, calculate the number of standardized sets that must be planned for in order to have 7,500 sets available to the customer each month.

1. Based on our estimates, how many extra kitchen sets will need to be purchased/produced to account for the damage, theft, defects…over the course of a YEAR?

1. The kitchen sets sell \$275.00 per set. They cost about \$200 to produce, deliver, and sell, though. Approximately how much will the company lose (cost) this year based on the estimates and your calculations?

# PART 3: Square Root Rule

A company presently has 4 warehouses. Each carries 4,000 units of inventory, which meets demand at a 2.5% stockout rate.

1. If the company decides to downsize and keep only 3 warehouses, how many units of inventory will the company need to carry at each of the three warehouses?

1. If the company decides to increase the number of warehouses to 5, how many units of inventory will the company need to carry at each of the five warehouses?

# PART 4: Impact of Exchange Rates on Manufacturing

1. A European car company is trying to decide if they should manufacture their vehicles for the US market in Europe, or in the United States. Please do the calculations that will help this company come to a decision.

1. Suppose the exchange rate is near 1 Euro = \$1.30. What would be the profit for the European car company (in Euros) if they manufactured their car in Europe? Remember, they have to pay the import tax.

1. Suppose the exchange rate is near 1 Euro = \$1.30. What would be the profit for the European car company (in Euros) if they manufactured their car in the United States? Remember, they avoid the import tax.

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