question number 6 please

Purtl. Overview of CA Using Avenge fe co Average Current cost per Unit from Vento GO LIG par fub 122 100 at bes 10 246 SU bo 15 4 20 110 112 25 eriger 10 foon DVD by boleh 10 Dacket 50 SA 140 EXOBIT 2.A Percent Random sample of Componententory Note: The plant operates were per year and proper rock one of each item, the current losle purchased and Questions No on. Before figuring the total costs under the present 1. What is the cost the compos and JIT system, two additional facts must be noted ny under the First, Ballenges inventory carrying costs are med 3. What would be the sotalot of nating the to be 20 percent per year on the verge investment compost ryder the mig in love for en hand, including its acquisition and wity transportation cous 3. Shallenger take into account and Second, der the current system, the number of e frethe IIT? If so, what are they units of each type of component pels stock is calcu. 4. If the JITtem is adigend, wether tyd of any lated as follows for those items purchased froen vendors Item that the od more than 300 miles away, a safety stock representing how much four weeks of used maintained. For there for vendors 5. Tide what many should between 100 and 500 miles away, afety stock repre occer in the related between Haller flemand imapalani , senting two weeks of use is maintained. For em from Achterliches the end closer, safety od gegen the serious com is maintained. In addition to safety stock, the wenig When the wants to leventory ofw item is the current lot size purchased 7.000 light otherwise the divided by 2 Shenger brother, Whapot If you are familiar with free or other spreadsheet 7. Carrycot 20 percent. I there alvorlig alware, you might try using it here, although it is net which both lengre end necessary leur chats Chapter 2. Legities and Information Technology 39 50 years ago. It involves an approach to inventory that, in generally tacitumption that there would be some turn, forces a complementary approach to production. defective componente purchased and that there would quality control, supplier relations, and distributor rela likely be something wrong with his product when it tionships. The major tenets of JIT can be summarized first came off the sembly line. For this reason, the as follows: Kalandore extensively tested (Their advertis 1. Inventory in itself is wasteful and should be ind. "We hope you'll never do what we do to your minime Kalamazoo mini), as were the components prior to 2. Minimum replenishment quantity is maintained totallation. To the extent that only a few of a particular for both manufactured and purchased parts type of component were en hand, the interruption in the 3. Minimum inventory of semifinished goods should production schedule would be that much greater. It might be maintained in this case, partially completed entall expensive rush orders for replacement components or equally expensive downtime for the entire plant. 4. Ddiveries of inputs should be frequent and small Jim was also concerned about his relationship with 5. The time needed to set up production lines should his suppliers, as compared way to a large auto manufac- be reduced to the absolute minimum turer. In the minimotor home business, generally the & Suppliers should be treated as part of the produs large. In this situation, it was somewhat more difficult to manufacturers are small and the component makers are tion team. This means that the vendor make every see the idea of the supplier as a part of the production effort to provide outstanding service and quality an, in the sense that the supplier would be expected and that there is usually a much longer lasting to make a special effort in either quality control or delly relationship with a smaller number of suppliers than is common in the United States ery flexibility on behalf of one of its almost miniscule accounts 7. The objective of the production system is zero defects Despite these concerns. Vim was painfully aware & The finished product should be delivered on a very that he was using a public warehouse near his plant that usually contained between $500,000 and $1,000,000 in short lead time Inventory on which he paid more than 15 percent per To the US. Inventory planner, vice president of month for the borrowed funds used to buy it, as well as Jogatice and production planspero non expect dating to the we of the warehouse Well In the preceding principles rated a number of disturbing addition, his firm was now producing so many differ prospects. Tim Ballenger was very aware of the costs ent models (one with a bath, one with a shower only) that might are if IT production system were to be and using so many different appliances (various types established. From the materials management and of radio, three varieties of refrigerator, etc.) that the point, the idea of deliberately planning many small costs of a safety stock for each component were going shipments rather than a few large ones appeared to up every day. ensure higher freight bills, especially from more dis- As an aid to making his decision on whether tant suppliers, for which freight rates would make the to try . JIT orientation at his plantim execu mout difference tive assistant, Kathy Williams, drew up a table that With regard to competition among suppliers. Tim summarized the anticipated impacts of a IIT system often had the opportunity, in the volatile mini-stor (see Exhibit 2. A). The figures are based on random home market, to buy out parts and component supplies samples of inventory items. The major component of from manufacturers that were going out of business any mini motor home the chassis would always Those components could be obtained at a substantial be purchased on one-sttime basis from Ford, savings with the moment that inventory in the par Chevrolet, Dodge, or International. With rare excep- ticolar parts be temporarily increased or that purchasestions, it would always be available on demand. It from existing vendors be temporarily curtailed. Perhaps would be delivered through the local dealer. If the the greatest question raised by IIT, however, had to do dealer did not have one in stock, one could easily be with the probability of much more erratic production as obtained from another area dealership. result of light supplies of components. Both with sup Bahibit 2.A is a representative 10 percent sample plier products and with his own, Jim operated with the of Kallenger's components inventory. It covers weekly MGM361 Principle of Business Logistics Case 1 CASE CASE 2.1 Just-in-Time in Kalamazoo Jim Ballenger was president of a medium-se firm Like others in the field. Timis company actually that manufactured mini motor homes in Kalamaron manufactured very few of its components. Virtually the Michigan. The firm bad expanded from a local Midwest entire product was assembled from components pur market to a national one, including Southern Californis chased from outside vendors. There was, however, and New England. As markets had expanded, so too had well-defined order in which the components could most sources of supply for the company, with major suppliers efficiently be installed in the vehicle. Recently, it had located in Southern California, the Pacific Northwest, become clear to Jin that transportation and inventory and Michigan. The decision to found the company in costs were a relatively large portion of his component Michigan had been made for two reason Timis former parts expenses and that they might be ripe for a substan associates in the auto industry were there, and the largest til reduction. He had been hearing about just-in-time single component of the mini--the truck or van chassis (IT) systems. According to some notes he had taken at on which the rest of the vehicle is built was purchased professional meeting, the IT production system was from one of the US light-truck makers developed by the Toyota Motor Company more than Purtl. Overview of CA Using Avenge fe co Average Current cost per Unit from Vento GO LIG par fub 122 100 at bes 10 246 SU bo 15 4 20 110 112 25 eriger 10 foon DVD by boleh 10 Dacket 50 SA 140 EXOBIT 2.A Percent Random sample of Componententory Note: The plant operates were per year and proper rock one of each item, the current losle purchased and Questions No on. Before figuring the total costs under the present 1. What is the cost the compos and JIT system, two additional facts must be noted ny under the First, Ballenges inventory carrying costs are med 3. What would be the sotalot of nating the to be 20 percent per year on the verge investment compost ryder the mig in love for en hand, including its acquisition and wity transportation cous 3. Shallenger take into account and Second, der the current system, the number of e frethe IIT? If so, what are they units of each type of component pels stock is calcu. 4. If the JITtem is adigend, wether tyd of any lated as follows for those items purchased froen vendors Item that the od more than 300 miles away, a safety stock representing how much four weeks of used maintained. For there for vendors 5. Tide what many should between 100 and 500 miles away, afety stock repre occer in the related between Haller flemand imapalani , senting two weeks of use is maintained. For em from Achterliches the end closer, safety od gegen the serious com is maintained. In addition to safety stock, the wenig When the wants to leventory ofw item is the current lot size purchased 7.000 light otherwise the divided by 2 Shenger brother, Whapot If you are familiar with free or other spreadsheet 7. Carrycot 20 percent. I there alvorlig alware, you might try using it here, although it is net which both lengre end necessary leur chats Chapter 2. Legities and Information Technology 39 50 years ago. It involves an approach to inventory that, in generally tacitumption that there would be some turn, forces a complementary approach to production. defective componente purchased and that there would quality control, supplier relations, and distributor rela likely be something wrong with his product when it tionships. The major tenets of JIT can be summarized first came off the sembly line. For this reason, the as follows: Kalandore extensively tested (Their advertis 1. Inventory in itself is wasteful and should be ind. "We hope you'll never do what we do to your minime Kalamazoo mini), as were the components prior to 2. Minimum replenishment quantity is maintained totallation. To the extent that only a few of a particular for both manufactured and purchased parts type of component were en hand, the interruption in the 3. Minimum inventory of semifinished goods should production schedule would be that much greater. It might be maintained in this case, partially completed entall expensive rush orders for replacement components or equally expensive downtime for the entire plant. 4. Ddiveries of inputs should be frequent and small Jim was also concerned about his relationship with 5. The time needed to set up production lines should his suppliers, as compared way to a large auto manufac- be reduced to the absolute minimum turer. In the minimotor home business, generally the & Suppliers should be treated as part of the produs large. In this situation, it was somewhat more difficult to manufacturers are small and the component makers are tion team. This means that the vendor make every see the idea of the supplier as a part of the production effort to provide outstanding service and quality an, in the sense that the supplier would be expected and that there is usually a much longer lasting to make a special effort in either quality control or delly relationship with a smaller number of suppliers than is common in the United States ery flexibility on behalf of one of its almost miniscule accounts 7. The objective of the production system is zero defects Despite these concerns. Vim was painfully aware & The finished product should be delivered on a very that he was using a public warehouse near his plant that usually contained between $500,000 and $1,000,000 in short lead time Inventory on which he paid more than 15 percent per To the US. Inventory planner, vice president of month for the borrowed funds used to buy it, as well as Jogatice and production planspero non expect dating to the we of the warehouse Well In the preceding principles rated a number of disturbing addition, his firm was now producing so many differ prospects. Tim Ballenger was very aware of the costs ent models (one with a bath, one with a shower only) that might are if IT production system were to be and using so many different appliances (various types established. From the materials management and of radio, three varieties of refrigerator, etc.) that the point, the idea of deliberately planning many small costs of a safety stock for each component were going shipments rather than a few large ones appeared to up every day. ensure higher freight bills, especially from more dis- As an aid to making his decision on whether tant suppliers, for which freight rates would make the to try . JIT orientation at his plantim execu mout difference tive assistant, Kathy Williams, drew up a table that With regard to competition among suppliers. Tim summarized the anticipated impacts of a IIT system often had the opportunity, in the volatile mini-stor (see Exhibit 2. A). The figures are based on random home market, to buy out parts and component supplies samples of inventory items. The major component of from manufacturers that were going out of business any mini motor home the chassis would always Those components could be obtained at a substantial be purchased on one-sttime basis from Ford, savings with the moment that inventory in the par Chevrolet, Dodge, or International. With rare excep- ticolar parts be temporarily increased or that purchasestions, it would always be available on demand. It from existing vendors be temporarily curtailed. Perhaps would be delivered through the local dealer. If the the greatest question raised by IIT, however, had to do dealer did not have one in stock, one could easily be with the probability of much more erratic production as obtained from another area dealership. result of light supplies of components. Both with sup Bahibit 2.A is a representative 10 percent sample plier products and with his own, Jim operated with the of Kallenger's components inventory. It covers weekly MGM361 Principle of Business Logistics Case 1 CASE CASE 2.1 Just-in-Time in Kalamazoo Jim Ballenger was president of a medium-se firm Like others in the field. Timis company actually that manufactured mini motor homes in Kalamaron manufactured very few of its components. Virtually the Michigan. The firm bad expanded from a local Midwest entire product was assembled from components pur market to a national one, including Southern Californis chased from outside vendors. There was, however, and New England. As markets had expanded, so too had well-defined order in which the components could most sources of supply for the company, with major suppliers efficiently be installed in the vehicle. Recently, it had located in Southern California, the Pacific Northwest, become clear to Jin that transportation and inventory and Michigan. The decision to found the company in costs were a relatively large portion of his component Michigan had been made for two reason Timis former parts expenses and that they might be ripe for a substan associates in the auto industry were there, and the largest til reduction. He had been hearing about just-in-time single component of the mini--the truck or van chassis (IT) systems. According to some notes he had taken at on which the rest of the vehicle is built was purchased professional meeting, the IT production system was from one of the US light-truck makers developed by the Toyota Motor Company more than