Operations Management: An Integrated Approach, 5th Edition

Problems

1. Elyssa's Elegant Eveningwear (EEE) needs to ship finished goods from its manufacturing facility to its distribution warehouse. Annual demand for EEE is 2400 gowns. EEE can ship the gowns via regular parcel service (3 days transit time), premium parcel service (1 day transit time), or via public carrier (7 days transit time). Calculate the average annual transportation inventory for each alternative.

2. Yasuko's Art Emporium (YAE) ships art from its studio located in the Far East to its distribution center located on the West Coast of the United States. YAE can send the art either via transoceanic ship freight service (15 days transit) or by air freight (2 days transit time). YAE ships 18,000 pieces of art annually.

• (a) Calculate the average annual transportation inventory when sending the art via transoceanic ship freight service.
• (b) Calculate the average annual transportation inventory when sending the art via air freight.
• (c) What additional information is needed to compare the two alternatives?

3. Joe, the owner of Genuine Reproductions (GR), a company that manufactures reproduction furniture, is interested in measuring inventory effectiveness. Last year the cost of goods sold at GR was $3,000,000. The average inventory in dollars was $250,000.

• (a) Calculate the inventory turnover for GR.
• (b) Calculate the weeks of supply. Assume 52 weeks per year.
• (c) Calculate the days of supply. Assume that GR operates 5 days per week.

4. Genuine Reproductions (GR) plans ...