Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A manufacturing company produces a product that requires multiple components to be assembled. The company has two suppliers for each component: Supplier A and

A manufacturing company produces a product that requires multiple components to be assembled. The company has two suppliers for each component: Supplier A and Supplier B. Each supplier has a different lead time and cost for producing the components. Supplier A has a lead time of 5 days and charges $10 per component. Supplier B has a lead time of 3 days and charges $12 per component. The company's daily demand for the product is 100 units. The company wants to minimize its costs while ensuring that it meets its daily demand. However, there is a risk associated with relying solely on one supplier, as any disruption in the supply chain could lead to delays and production downtime. How can the company determine the optimal ordering strategy for the components from the two suppliers to minimize costs and mitigate supply chain risks? Consider factors such as lead time, cost, demand, and the need for backup suppliers. Provide a detailed explanation of your approach and the factors considered in making the decision.

Step by Step Solution

3.57 Rating (164 Votes )

There are 3 Steps involved in it

Step: 1

To determine the optimal ordering strategy for the components from the two suppliers Supplier A and Supplier B the manufacturing company needs to consider both cost optimization and risk mitigation du... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Automation Production Systems and Computer Integrated Manufacturing

Authors: Mikell P.Groover

3rd edition

132393212, 978-0132393218

More Books

Students also viewed these General Management questions

Question

Identify the determinants of quality.

Answered: 1 week ago

Question

Write each fraction as a percent. 7 50

Answered: 1 week ago