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1、test twotheandMike McNeely, logistics manager for the Illumination Light Company, has considered replacing the firms manual customer order management system with electronic ordering, an EDI application. He estimates current system, including labor, costs $2.50/order for transmission processing when

2、annual order volume is under 25,000. Should the order volume equal or exceed 25,000 in any given year, Mr. McNeely will have to hire an additional customer service representative to assist order reception in the manual process. This would raise the variable cost to $3.00/order. He has also estimated

3、 the rate of errors in order placement and transfer to be 12/1000 orders.areEDIEDI would cost $100,000 upfront to implement and variable costs determined to be $0.50/order regardless of volume. EDI could acquire and maintain order information with an error rate of 3/1000 orders. An specialist would

4、be required to maintain the system at all times as well. Her salary is $38,000 in the first year and increases 3 percent each year thereafter.Order errors cost $5.00 per occurrence on average to correct in the manual system. EDI errors cost $8.00 on average to correct since the specialist inspects t

5、he system for flaws on most occasions.would EDI pay for itselfa. If the firm expects order volume over the next 5 years to be 20,000, 22,000, 25,000, 30,000, and 36,000 annually, within the first 5 years?McNeely consider whenb. What effects aside from cost might Mr. implementing EDI?a.Manual: order

6、cost error cost total cost1year: 20000x2.5+(12/1000)x20000x5=512002year: 22000x2.5+(12/1000)x22000x5=563203 year: 25000x3+(12/1000)x25000x5=765004 year: 30000x3+(12/1000)x30000x5=91800order cost total cost+0.5x20000=148480 +0.5x22000=506685 year: 36000x3+(12/1000)x36000x5=110160 b.EDI: device cost s

7、alary error cost 1year: 100000+38000 +20000x(3/1000)x8 2year: 38000x(1+3%)+22000x(3/1000)x83 year:38000x(1+3%)a2+25000x(3/1000)x8+0.5x25000=534144 year:38000x(1+3%)3+30000x(3/1000)x8+0.5x30000=57243.638000x(1+3%)A4+36000x(3/1000)x8+0.5x36000=61633.35 year: test threethe order quantity fors average i

8、nventory1.Mr. Stan Busfield, distribution center manager for Hogan Kitchenwares, must determine when to resupply his stock of spatulas. The DC experiences a daily demand of 400 spatulas. The average length of the performance cycle for spatulas is 14 days. Mr. Busfield requires that 500 spatulas be r

9、etained as safety stock to deal with demand uncertainty. a. Use simple reorder point logic to determine spatulas.b. Based on your answer to part (a), find Mr. Busfield level of spatulas.Use the reorder point to find the order quantity:R = D x T + SS= 400 x 14+500 =reorder point is 6100, Order quanti

10、ty is more than or equal to 5600.6,100 spatulasa.b.The average inventor is one-half the order quantity + safety sock: If Order quantity is equal to 5600, thenAverage inventory =5600/2+500 =3,300 spatulas4. Mr. John Eastes oversees the distribution of Tastee Sancks products from the plant warehouse t

11、o its two distribution centers in the United States. The plant warehouse currently has 42,000 units of the companys most popularproduct, Chocolate Chewies. Mr. Estes retains 7000 units of the product at the warehouse as a buffer. The Cincinnati DC has an inventory of 12500 units and daily requiremen

12、ts of 2500 units. The Phoenix DC has an inventory of 6000 units and daily requirements of 2000 units.a. Determine the common days supply of Chocolate Chewies at each DC.b. Given the above information and your answer to part (a), use fair shareallocation logic to determine the allocated to each DC. a

13、.Common days supply of chocolDS =(42,000- 7,000)b. Fair Share Allocation Logic: Allocation = (Days Supply xnumber of Chocolate Chewies to beate chewies:Daily Requirements) - Inventory 12,500= 17,225 units6,000 = 17,780 units+ 18,500/4500=11.89 days (around)ACincinnati = (11.89 x 2,500) APhoenix =(11

14、.89 x 2,000)Attention : Together, the allocations equal 35,005 units (17,225 +17,780)which is 5 more than the plant warehouse s allocation supply. The difference rests with the rounding of the daysupplsy figure.2. Mr. Busfield recently completed a course in logistics management and now realizes that

15、 there are significant costs associated with ordering and maintaining inventory at his distribution center. Mr. Busfield has learned that the EOQ is the replenishment logic that minimizes these costs. In an effort to find the EOQ for measuring cups, Mr.Busfield has gathered relevant data. Mr. Busfie

16、ld expects to sell 44,000 measuring cups this year. Hogan acquires the measuring cups for 75 cents each from ShatterIndustries. Shatter charges $8 for processing each order. In addition, Mr. Busfield estimates his companys inventory carrying cost to be 12 percent annually.a. Find Mr. Busfields EOQ f

17、or measuring cups. Assume that Mr. Busfield accepts ownership of products upon arrival at his DC.b. Now assume Mr. Busfield must arrange for inbound transportation of the measuring cups since Hogan accepts ownership of products at the suppliers shipping point.Quantities of fewer than 4000 measuring

18、cups cost 5 cents per unit to ship. Quantities of 4000 and above cost 4 cents per unit to ship. Determine the difference in total costs associated with an EOQ of 4000 units and the EOQ level found in part (a) when transportation costs must be considered.c. Given the information above and the low cos

19、t EOQ alternative determined in part (b), use period-order-quantity logic to determine the number of orders Hogan would place each year for measuring cups and the time interval between orders.a. The economic order quantity (EOQ) is the square root of the product of thenumerator (two times order cost

20、 and demand) divided by the product of thedenominator (inventory carrying cost times unit cost):EOQ2,797 cupsAnnual total cost with order quantities of 2,797 cups ( calculated in part (a):Inventory Carrying Costs( 2,797/2 ) x 0 .75x 12%$ 125.87to determine Order Costs, the number of whole orders/yr

21、shall firstly be determined:(44,000/2797)15.73 - roundup to 16 whole orders/yr.Oorder costs= 16 orders x$8 / order128.00Transportation Costs44,000 units x $0 .05 / unit$ 2,200$ 2,453.87 /yearTotal Cost ( EOQ = 2,797 units )Annual total cost with order quantities of 4,000 cups:Inventory Carrying Cost

22、s =(4,000/2) x 0.75x 0.12 =180Order Costs : determine the number of whole orders/ yr.44,000 /4,00011 whole orders/ yr11 orders x $8/order= $ 88Transportation Costs44,000 units x ($0.04/unit) =$1,760.00Total Cost ( EOQ4,000 units)$ 2,028-2,028.00) $425.87 less ann uallyThe order quantity of 4,000 uni

23、ts costs ( $2,453.87than 2,797 order quantity found in part (a) when transportation costs are considered.Test 4: 1. Super Performance Parts (SPP) produces braking devices exclusively for the Ace Motor company, an automotive manufacturer. SPP has been leasing warehouse space at a public facility 20 m

24、iles from the companys plant. SPP has been approached by a group of four otherAce suppliers with the idea of building a consolidated warehouse to gain transportation and materials handling economies. An investment of $200,000 would be required by each of the five companies to acquire the warehouse.

25、Payment of the initial investment secures I0 years of participation in the agreement. Annual operating expenses are anticipated to be $48,000 for each party. SPP is currently charged $6000 per month for use of the public warehouse facilities. SPPs outbound transportation from the public warehouse of

26、ten consists of LTL quantities. Its annual outbound transportation bill is currently $300,000. SPP expects consolidated warehousing to more fully utilize truckload quantities with transportation expenses shared among the supplier pool. SPPs annual outbound bill would be reduced by 25 percent in the

27、consolidated plan.Differences in inbound transportation costs are assumed negligible in this case.with consolidated warehousing asa. Compare the storage and shipping costs associatedopposed to SPPs current, direct shipping plan. Areany efficiencies apparentthroughconsolidation?b. Aside from potentia

28、lly reducing costs, how else mightSPPbenetit by participatingin theconsolidated warehouse?c. What disadvantages might exist in a consolidated warehouse as opposed to a direct shippingsituation?a. Direct Shipping Plan (annual costs)Storage costs:$6,000/month x 12 months$ 72,000Shipping costs:$ 300,00

29、0Annual total costs:$372,000Consolidated warehousing (annual costs)Storage costs:fixed $200,000/ 10 years20,000/yearOperations cost$ 48,000Shipping costs:($300,000) x (1 - 25%)$ 225,000$293,000stenAnnualtotalcosts:b. The consolidated warehouse can be operated for $79,000 less per year over the agree

30、mentyear life.This is a creative thinking question for the purpose of discussion. Key points may include but arenot limited to: better customer service (in various forms) to Ace, synergy through coordinationwith partners, SPP may be able to utilize/share assets not financially feasible on their own.

31、c. This too is a creative thinking question. Key points might be: added risk through ownership(part-ownership), potential difficulties with coordination across partners, incongruentobjectives may lead to tribulations, and possible cash flow difficulties due to fixed investmentexpen ditures2. Assume

32、you are the logistics manager for a luggage company.All bags areY 30 each,are stored in a warehouse near the factoryprior to distributiontoDC locationsinShan ghai, and the DC exp erie nces an annual dema nd of 700,000bags. Nowthep roduced at the manu facturi ng facility in Guan gzhou. The bags, valu

33、ed atisasproductsare transportedby rail and the average inventory for each warehouse100,000 bags. You estimate the inven tory carry ing cost to be 30 percent annu ally andthe average inven tory can be reduced 1% if the delivery time reduced one day eachcomparedwith the current.There are four transpo

34、rtationoptionsavailablefollowi ng:Transp ortati on modeRate(Yua n each)Average delivery timefreque ncyRail0.12110Pi ggyback (rail-truck)0.151420Motor(truck)0.2520air1.4240Questi on: Now you n eed to decide which mode shall be selected to achieve the lowesttotal cost?(详细求解过程没有哦)Cost StructureTranspor

35、tation costIn-transit inventory castinventory carrying CD?t in fact口 ryin veritorycarrying cost in warehouseTotl Co SbCalculation metriodRDICDBSeS劇皿sumRail70000362466900000903000223546GP iggyback (rail-truck)1050002416444185004205931135737Motor (truck)14000086301378000330520934821air9800003452118225

36、01907551337526A: Motor transportation shall be selected to achieve the lowest total cost!R: trariaportation rate; D: Annual demarid; I: Inventory carryingcost(%/year); C: product value in factory; C: product value Inwarehouse (匚+R); T: Average delivery time ; Ai: Average Inventorytest 5 :Ms. Sara Ri

37、tter is the distribution manager for the Fiesta Soft Drink Company. She is considering full automation of the plants warehouse. At present, the warehouse utilizes a mechanized system of materials handling.TheThe current system employs 20 laborers at an average wage rate of $13/hour. Laborers work an

38、 average of 2000 hours per year. mechanization costs $1 8,000 annually to maintain. The equipment was purchased 2 years ago with uniform payments of $25,000 made annually. In year 9 the mechanical equipment will be replaced by new machinery with fixed annual costs of $35,000. In addition, it will co

39、st Fiesta $12,000 per year to maintain the new equipment with the same 20 laborers.forThe automated equipment would cost $1.2 million upfront implementation. Only eight laborers and an automation specialist would be required to maintain operations in the new system. The laborers would earn $16/hour

40、over 2000 hours each year. The automation specialist would earn a salary of $56,000 per year, increasing 2 percent annually after the first year. Much of the old mechanized equipment could be sold immediately for a total of $125,000. Maintenance of the automated system is estimated at $60,000 each y

41、ear with this cost growing by 3 percent annually after the first year. The automated system is expected to serve Fiesta for 15 years. a. Examine the cash flow under each system. What is the payback period for automation?anKeytheb. What advantages aside from long-term cost savings might automated war

42、ehouse have over more labor-intensive systemscan perform warehouse operations with greater certainty and less product damage.b. This is a creative thinking question for the purpose of discussion. points may include but are not limited to: automated systems have potential to operate faster and more a

43、ccurately than mechanized systems. In addition, the automated system requires less building space ands accompanying cash flow (next ten or fifteen years):a. First,lets look at each system Mecha ni zed Han dli ng System:0(20x$13/hrx 2.000 hrs)+($18,000)+($25,000)=4563.0001(0 X $13/br X 2,000 hrs)+($1

44、8,000)+($25000)=$563.0002(20 X 13/hrx 2.000 hrs)($18.000)($25,000)=4563,0003(20 X $13/br X 2.000 hrs)+($18,000)+($25,000)=$563.0004(20xl3/lirx 2,000 hrs)($18.000)十($25,000)=$563,0005(0 X $13/hrx 2,000 hrs)+($18,000)+($25,000)=$563.0006(20 X $13/rirx 2,000 (113)+($18,000)十($25.000)=$563,0001(0x$13/br

45、x 2.000 hrs)4($18,000)+($25,000)=$563.0008(20 X $13/hrx 2,000 ri)-+($18,000)十($25,000)=$563,0009(20 X $13/hrx 2.000 hrs)+($12.000)+($35000)=$567.00010C20 X 113/hr X 2,000 hrs)($12.000)十($35,000)=$567,000Vearlabor expens虽maintenance costsAnnual Costequipment costsYear0labor expensesspecialists salary

46、 maintenance costsUpfrorrt investment of $1,2 million - 1125,000 sale of old system =X234567eg10(S(8(8(8(8(8(8(0(8$llG/tir. 16/hr. $16/lir. $16/hr. $164ir.$15/lir. $1跡, $16/hr.*、(8 X tie/hr,2.000 hrs J .000 hrs.) 2.000 hrs J .000 hrs.) 2.000 hrs J .000 hrs J 2.000 hrs J .000 hrs.) 2000 hrs J 3.000 h

47、rs J($56.000)($5&000)X1.02($56.000jx1.022($5&0001X1.023($56, OOOjxl.024($55,000 X 1.025($S6,000jx1.026($56.0001X1.027($56, OOOjxl.028($5 乞 000)X1.029+ ($60.000)+ ($60,000)X1.03+ C$60.000)x1.032+ C$60,000)X1.033+ ($60.000)x1.034+ C$eO, 000) X 1.035+ ($ECi,000)x1,030+ ($60,000)X1.037+ ($60.000)x1.033十

48、($60,000)X1.039Annual CosttLOYS.OOO372.000374,920377,916300,991384,147337,385390,703394,1 19397,61940L212Automated Han dli ng System:Now lets look at the cumulative ten-year costs of each system:YearMecha ni zedAutomated0$ 563,000$ 1,075,0001$ 1,126,000$ 1,447,0002$ 1,689,000$ 1,821,9203$ 2,252,000$

49、 2,199,836*4$ 2,815,000$ 2,580,8275$ 3,378,000$ 2,964,9746$ 3,941,000$ 3,352,3597$ 4,504,000$ 3,743,0678$ 5,071,000$ 4,137,1869$ 5,638,000$ 4,534,80410$ 6,201,000$ 4,936,017*By comparing cumulative costs for each system, we could see the mecha ni zed system surp asses the automated system s op erat

50、ing expen ses in the third year ($2,252,000vs.$2,199,836).Test 6 :Chronotronics produces two models of clock radios, the X-100 and the X-250 deluxe. Both products are currently packaged in a single-wall corrugation. Through close observation, the firm has discovered that 0.5 percent of both X-100s a

51、nd X-250s are damaged between packaging and customer delivery. Chronotronics can package either model, or both, in double-wall corrugated fiberboard, which would reduce produc damage by half. The current single-wall packaging costs $0.80 per unit. Double-wall packaging costs 20 percent more. The X-1

52、00 and X-250 have market values of $40 and $70, respectively. Damaged units are a total loss. Chronotronics sold 12000 X-100s and 7000 X-250s last year. Forecasts indicate consistent sales for the X-100 and a 5 percent increase in X-250 sales over the next year. Note: Round up for whole units lost.a

53、. From a least-cost perspective, should Chronotronics utilize double-wall corrugation with the X-100 next year?b. From a least-cost perspective, should Chronotronics utilize double-wall corrugation with the X-250 next year?c. From what you lerned in the course, how might packaging improvements affect transportation costs?a.Compare the additional cost of providing double-wall corrugation for the X-100 withits potential loss and damage savings:Additional costcost/unit xforecasted sales($0.80 x 0.2) x12,000= $1,920Potential loss/Savings:First find the number of whol

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