Case 3 MBA_731 John Burkhart 11/21/12 Parts Emporium EG151: Exhaust Gasket DB032: Drive Belt 1. Total costs for EG151; include ordering costs and holding costs. Compare this to the current system costs. You do no need to include the cost of safety stock for this comparison. Actual cost for this part: $4.16 Ordering Cost: $20.00 Holding cost: 20% of inventory investment Units on hand: 0 Units on back order: 11 Units scheduled receipt: 150 Total Cost: $624 + $20 + $125
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Parts Emporium Aaron Lee 1. EG151 Exhaust Gasket D(21 weeks) = 2142 D(annual) = 5304 H= (12.99)(1-0.32)(0.21)= 1.85 EOQ= 338 gaskets placed 15.68 times per year Cost of ordering = (15.68)($20) =$313.60 Average cycle inventory = 338/2= 169 gaskets Standard deviation = 2.86 gaskets Associated z value for 95% confidence = 1.65 Safety stock = 4 gaskets Reorder point = 208 gaskets Total holding costs = $312.65 In conclusion‚ Parts Emporium should order 338 gaskets whenever current inventories reach
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CASE: PARTS EMPORIUM • Sue McCaskey‚ the new materials manager of a wholesale distributor of auto parts. • She seeks ways to cut the bloated inventories while improving customer service. • Back orders with excessive lost sales are all too frequent. Inventories were much higher than expected when the new facility was built‚ even though sales have not increased. CASE: PARTS EMPORIUM • Summary data on inventory statistics‚ such as inventory turns‚ are not available. • McCaskey decides to begin
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INTRODUCTION Parts Emporium‚ Inc. is a wholesale distributor of automobile parts formed by two disenchanted auto mechanics‚ Dan Block and Ed Spriggs. Originally located in Block’s garage‚ the firm showed slow but steady growth for 7 years before it relocated to an old‚ abandoned meat-packing warehouse on Chicago’s South Side. With increased space for inventory storage‚ the company was able to begin offering an expanded line of auto parts. Fifteen years later‚ Parts Emporium was the largest independent
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The People The French adhere to a strong and homogeneous set of values. They cherish their culture‚ history‚ language and cuisine‚ which is considered an art. The French have been and are today world leaders in fashion‚ food‚ wine‚ art and architecture. They embrace novelty‚ new ideas and manners with enthusiasm as long as they are elegant. Meeting and Greeting * At a business or social meeting‚ shake hands with everyone present when arriving and leaving. A handshake may be quick with a light
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Chapter 13: Parts Emporium* A. Synopsis This case describes the problems facing Sue McCaskey‚ the new materials manager of a wholesale distributor of auto parts. She seeks ways to cut the bloated inventories while improving customer service. Backorders with excessive lost sales are all too frequent. Inventories were much higher than expected when the new facility was built‚ even though sales have not increased. Summary data on inventory statistics‚ such as inventory turns‚ are not available. McCaskey
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Chapter 12 Inventory Management Discussion Questions 1. The short answer is that higher inventories do not provide an advantage in any of the nine competitive priority categories. The important point is that firms must have the “right amount” of inventory to meet their competitive priorities. The only relevant costs considered in this chapter are ordering costs‚ holding costs‚ and stockout costs. In the economic order quantity (EOQ) model‚ costs of placing replenishment orders tradeoff
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INTRODUCTION Parts Emporium‚ Inc. is a wholesale distributor of automobile parts formed by two disenchanted auto mechanics‚ Dan Block and Ed Spriggs. Originally located in Block’s garage‚ the firm showed slow but steady growth for 7 years before it relocated to an old‚ abandoned meat-packing warehouse on Chicago’s South Side. With increased space for inventory storage‚ the company was able to begin offering an expanded line of auto parts. Fifteen years later‚ Parts Emporium was the largest independent
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To: Dr. From: Subject: Parts Emporium Date: 22/03/2015 Wholesale distributor‚ Parts Emporium have experienced on the business growing path challenge from supply chain management side. Company is specialized in the distribution of auto parts and playing key role in that segment as largest and fully independent supplier in north central region of US. To implement optimal solution company have decided to hire Sue McCaskey as Material Manager. First day at work Sue is trying to focus her activity on
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policies. Cost Category Current Plan Proposed Plan Ordering cost $707 $313 Holding cost (cycle inventory) 139 314 TOTAL $846 $627 The total of these two costs for the gasket is reduced by 26 percent (from $846 to $627) per year. The safety stock with the proposed plan may be higher than the current plan‚ if the reason for the excess back orders is that no safety stock is now being held (inaccurate inventory records or a faulty replenishment system are other explanations). We cannot determine the
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