Chapter 6, Problem 2QP

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?

Suppose this information is available for PepsiCo, Inc. for 2015, 2016, and 2017. (in millions)   2015   2016   2017 Beginning inventory   $ 2,100   $ 2,400   $ 2,300 Ending inventory   2,400   2,300   2,700 Cost of goods sold   18,227   20,071   20,478 Sales revenue   39,145   42,957   44,066 Calculate the days in inventory for PepsiCo, Inc. for 2015, 2016, and 2017. (Round days in inventory to 1 decimal place, e.g. 5.1.)     2015   2016   2017 Days in inventory      days

L. Houts Plastics is a large manufacturer of injection-molded plastics in North Carolina. An investigation of the company's manufacturing facility in Charlotte yields the information presented in the table below. How would the plant classify these items according to an ABC classification system? (Round dollar volume to the nearest whole number and percentage of dollar volume to two decimal places.) Item number 2349 should be classified as Item Code Item number 8210 should be classified as 1289 2347 2349 2363 2394 2395 6782 7844 8210 8310 9111 L. Houts Plastics Charlotte Inventory Levels Avg. Inventory (units) 380 300 120 70 POHONNO 60 25 20 12 5 7 Value ($/unit) 3,25 6 4.00 2.50 1.30 1.75 2.25 1.15 2.05 2.00 2.00 3.00 Dollar Volume 1,200 300 105 23 25 70 % of Dollar Volume 39.00 9.75 3.41 14 18 3,077 For the following three questions, consider only items 1289, 2349, and 8210 from the above table for relative classification (these are some of the items for which you computed the…