Wanda Lux must select a supplier for a plastic bottle and proprietary dispenser for its new hair shampoo. Three suppliers have placed bids; at Wanda's request, all bids are for a shipping quantity (Q)of 20,000 bottles with annual requirements (D) of 40,000 units. Wanda's factory operates 250 days a year. The following table shows each supplier's price, estimated annual freight costs, and currentlead times; management has added estimates for holding costs and administrative oversight costs for each supplier.UsingFreightCostsSupplier$3,000Dover PlasticsEvan & SonsFarley, Inc.$3,500$4,500a. Which of the three suppliers will provide the lowest annual cost to Wanda Lux?AnnualPrice/Unit Holding Cost/Unit(P)View an example Get more help.$5.10$5.00$5.15(H)$1.02$1.00$1.03LeadTime (L)(days)14171847Dis the lowest cost alternative, with annual total costs to Wanda Lux of $. (Enter your response rounded to the nearest whole number.)Annual AdministrativeCosts$4,000$3,000$5,000Clear allCheck answer

Annual demand = 40000 units Number of operating days = 250 Daily requirement = 40000/250 = 160…

Wanda Lux must select a supplier for a plastic bottle and proprietary dispenser for its new hair shampoo. Three suppliers have placed bids; at Wanda's request, all bids are for a shipping quantity (Q) of 20,000 bottles with annual requirements (D) of 40,000 units. Wanda's factory operates 250 days a year. The following table shows each supplier's price, estimated annual freight costs, and current lead times; management has added estimates for holding costs and administrative oversight costs for each supplier. Freight Costs Using Supplier Dover Plastics Evan & Sons Farley, Inc. a. Which of the three suppliers will provide the lowest annual cost to Wanda Lux? Annual Price/Unit Holding Cost/Unit (P) (H) $1.02 $5.10 $5.00 $1.00 $5.15 $1.03 $3,000 $3,500 $4,500 Lead Time (L) Annual Administrative (days) 14 17 18 D Costs $4,000 $3,000 $5,000 is the lowest cost alternative, with annual total costs to Wanda Lux of $. (Enter your response rounded to the nearest whole number.)

Wanda Lux must select a supplier for a plastic bottle and proprietary dispenser for its new hair shampoo. Three suppliers have placed bids; at Wanda's request, all bids are for a shipping quantity (Q) of 20,000 bottles with annual requirements (D) of 40,000 units. Wanda's factory operates 250 days a year. The following table shows each supplier's price, estimated annual freight costs, and current lead times; management has added estimates for holding costs and administrative oversight costs for each supplier. Freight Costs Using Supplier Dover Plastics Evan & Sons Farley, Inc. a. Which of the three suppliers will provide the lowest annual cost to Wanda Lux? Annual Price/Unit Holding Cost/Unit (P) (H) $1.02 $5.10 $5.00 $1.00 $5.15 $1.03 $3,000 $3,500 $4,500 Lead Time (L) Annual Administrative (days) 14 17 18 D Costs $4,000 $3,000 $5,000 is the lowest cost alternative, with annual total costs to Wanda Lux of $. (Enter your response rounded to the nearest whole number.)

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?
Bradley Solutions and Alexander Limited are two well-established suppliers of inexpensive tools. Meanwhile, Weekend Projects is a national chain of retail outlets and wants to find a supplier for a particular tool set that promises to be a big seller. Expected annual sales are 100,000 units (D). Weekend's warehouses operate 50 weeks a year. Management collected data on the two suppliers, which are contained in the table below: Annual Freight Costs Shipping Quantity (Q) Annual Lead Annual Supplier 20,000 40,000 Price/unit(p) Administrative Holding Cost/Unit(H) (L)(wks) $1.5 $1.8 Time Cost Bradley $30,000 $20,000 Alexander $25,000 $22,000 $6 $5 $20,000 $30,000 4 What is the total annual cost for Weekend Projects if the company chooses Alexander as the supplier and determines the shipping quantity at 40,000 units per shipment? $608,600 O $609,600 $606,600 O $607,600
Wanda Lux must select a supplier for a plastic bottle and proprietary dispenser for its new hair shampoo. Three suppliers have placed bids; at Wanda’s request, all bids are for a shipping quantity of 20,000 bottles with annual requirements of 40,000 units. Wanda’s factory operates 250 days a year. The first table (below) shows each supplier’s price, estimated annual freight costs, and current lead times; management has added estimates for holding costs and administrative oversight costs for each supplier. Beyond costs, however, Wanda has three other criteria considered important in the selection of a supplier. The second table (see below) shows all the criteria, their weights, and the scores for all of them except total costs, where a score of 1 indicates “poor” and 10 indicates “superior.” Because all three suppliers have done business with Wanda Lux before, management will assign a score of “10” to the supplier with the lowest total annual cost, a score of “8.5” for the next lowest…
Northcutt manufactures high-end racing bikes and is looking for a source of gear sprocket sets. Northcutt would need 1400 sets a month. Supplier A is a domestic firm, and Suppliers B and C are located overseas. Cost information for the suppliers is as follows: Supplier A- Price of $150 per set, plus packing cost of $3.00 per set. Total inland freight costs for all 1400 units would be $550 per month. Supplier B- Price of $74.00 per set, plus packing cost of $2.00 per set. International transportation costs would total $4000 per month, while total inland freight costs would be $850 per month. Supplier C- Price of $97 per set, plus packing cost of $4 per set. International transportation costs would total $4800 per month, while total inland freight costs would be $1200 per month. The total landed cost per month for Supplier B is __$
Alison's Accessories is a high volume worldwide fashion house with outlets in 65 countries. Sadly, space does not permit an exhaustive list but once the test is over, check out their website. Kalil, the supply chain manager is conducting her usual thorough analysis of her final four candidates for supplier and has developed the following tables of pertinent costs and other shipping metrics. Regardless of supplier, Alison's Accessories will operate 220 days per year and has forecast annual demand of 250,000 units. Kalil has obtained quotes for three different shipment sizes (Freight Costs table). All costs are in US Dollars. Table 1 Unit costs Supplier Price/Unit Carrying Cost A 123 22 B 125 19 C 126 18 D 100 40 Annual Freight Costs Supplier 15,000 units 25,000 units 50,000 units A 380,000 260,000 237,000 B 615,000 547,000 470,000 C 285,000 240,000 200,000 D 380,000 260,000 237,000 Other Costs Supplier Lead Time Annual Admin Costs A 30 250,000 B 15 275,000 C 7 225,000 D 90…
Eagle Electric Repair is a repair facility for several major electric appliance manufacturers. Eagle wants to find a low-cost supplier for an electric relay switch used in many appliances. The annual requirements for the relay switch (D) are 100,000 units. Eagle operates 250 days a year. The following data are available for two suppliers, Kramer and Sunrise, for the part: Supplier Freight CostsShipping Quantity (Q ) Price/Unit (p) Carrying Cost/Unit (H ) Lead Time (L) (days) Administrative Costs 2,000 10,000 Kramer $30,000 $20,000 $5.00 $1.00 5 $10,000 Sunrise $28,000 $18,000 $4.90 $0.98 9 $11,000 Which supplier will provide the lowest annual total costs?
The Bennet Company purchases one of its essential raw materials from three suppliers. Bennet's current policy is to distribute purchases equally among the three suppliers. The owner's son, Benjamin Bennet, just graduated from a business college. He proposes that these suppliers be rated (high numbers mean a good performance) on six performance criteria weighted as shown in the table. A total score hurdle of 0.60 is proposed to screen suppliers. Purchasing policy would be revised to order raw materials from suppliers with performance scores greater than the total score hurdle, in proportion to their performance rating scores. Rating Supplier A Performance Criterion 1. Price 2. Quality 3. Delivery 4. Production facilities 5. Environmental protection 6. Financial position Weight Supplier B Supplier C 0.2 0.5 0.6 0.8 0.3 0.5 0.6 0.8 0.2 0.3 0.8 0.7 0.1 0.6 0.3 0.4 0.1 0.5 0.6 0.7 0.1 0.8 0.7 09 Use a preference matrix to calculate the total weighted score for each supplier. The weighted…
Reliance Fresh is sourcing electric tandoori ovens from Panasonic for its Indian retail operations. The two parties have negotiated a wholesale supply price of $310/unit. The expected demand distribution for the tandoori ovens is given below. Reliance plans a selling price of $430/unit, ovens unsold after 6 months will be sold at a clearance price of $215/unit. What is the expected Reliance Fresh profit if the wholesale order quantity is 5300 units? Integer answer. DEMAND PROBABILITY 4,361 6% 4,789 14% 4,935 21% 5,001 28% 5,420 22% 5,573 9% 6,373 5% Panasonic’s variable cost is $130/unit and the fixed production cost is $207,109. What is Panasonic’s (manufacturer) profit? Integer answer.
Tommy's Family Furniture is looking for a new supplier for its armchairs. Tommy is primarily interested in only two criterion: price and name brand value. He considers the value of the name brand to be three times more important than price. Tommy has narrowed his choices to two suppliers. On a 10-point scale, he has assigned Amy's Armchairs a score of 8 on price and 5 on name brand value. He has assigned Annie's Armchairs a score of 3 on price and 6 on name brand value. Apply the factor weighting technique to help Tommy choose a new armchair supplier.
Deere & Company (brand name John Deere) is famed for the manufacture and supply of machineryused in agriculture, construction, and forestry, as well as diesel engines and lawn care equipment. In2014, Deere & Company was listed 80th in the Fortune 500 America’s ranking and was 307th in the2013 Fortune Global 500 ranking. Supply Chain Cost Reduction Challenges: Deere and Company has a diverse product range, whichincludes a mix of heavy machinery for the consumer market, and industrial equipment, which is made toorder. Retail activity is extremely seasonal, with the majority of sales occurring between March and July. The company was replenishing dealers’ inventory weekly, using direct shipment and cross-dockingoperations from source warehouses located near Deere & Company’s manufacturing facilities. This operation was proving too costly and too slow, so the company launched an initiative to achieve a 10%supply chain cost reduction within four years. The Path to Cost…
Discuss supply chain capabilities and the cost-responsiveness in Avoiding the Bullwhip Effect.