Exam 18: Inventory Management: Economic Order Quantity,jit,and the Theory of Constraints

Tiffany Manufacturing Company produces X and Y with contribution margins per unit of $10 and $90, respectively. Only 200 labour hours and 400 machine hours are available for production. Time requirements to produce one unit of X and Y are as follows: Product X Product Y Labour hours per unit 1 2 Machine hours per unit 5 1 -Refer to the figure.What is the constraint on labour hours for Tiffany Manufacturing Company?

Nashville Company manufactures candy.The company buys chocolate used in the candy in 10-kilogram boxes that cost $10 each.The company uses 30,000 of the boxes per year,and usage occurs evenly throughout the year. The average cost to carry a 10-kilogram box in inventory per year is $4,and the cost to place an order is $3. a.Determine the economic order quantity for the chocolate in terms of 10- kilogram boxes. b.If the company works 250 days per year,on the average,how many boxes of chocolate are used per working day? c.If the lead time for an order is normally eight working days,determine the reorder point for chocolate. d.If 50 boxes of chocolate are carried as safety stock,determine the reorder point for the chocolate.

On which three operation measures of system performance does theory of constraints focus?

Willie Manufacturing Company increased the size of several inventory order quantities that had previously been determined using the EOQ model.What is the impact on the total amount of annual carrying and ordering costs?

Heft Company produces A and B with contribution margins per unit of $40 and $30, respectively. Only 500 labour hours and 300 machine hours are available for production. Time requirements to produce one unit of A and B are as follows: Product A Praduct B Labour hours per unit 5 2 Machine hours per unit 1 4 -Refer to the figure.What is the constraint on machine hours for Heft Company?

Refer to the figure.If the company operates 200 days a year and the lead time for the item is five days,what is the reorder point if a safety stock of 50 units is maintained?

Which of the following are strategic objectives of JIT?

Using the graphic approach to linear programming,what is usually the solution?

What is the term for a marker or card that signals to a supplier the quantity of materials that need to be delivered and the time of delivery?

What is the term for the cost of preparing equipment and facilities so they can be used to produce a particular product or component?

What is the correct order for the four steps that must be followed to solve problems graphically?

What is the definition of a drummer?

What does economic order quantity do?

Baldwin Corporation produces two types of wagon frames,(Frame X and Frame Y).Frame X passes through four processes: cutting,welding,polishing,and painting.Frame Y uses three of the same processes: cutting,welding,and painting.Each of the four processes employs 40 workers who work 8 hours each day.Frame X sells for $80 per unit,and Frame Y sells for $110 per unit.Materials is the only unit-level variable expense.The materials cost for Frame X is $40 per unit,and the materials cost for Frame Y is $50 per unit.Baldwin's accounting system has provided the following additional information about its operations and products: Baldwin's management has determined that any production interruptions can be corrected within two days. a.Assuming that Baldwin can meet daily market demand,compute the potential daily profit.Now compute the minutes needed for each process to meet the daily market demand.Can Baldwin meet daily market demand? If not,where is the bottleneck? Can you derive an optimal mix without using a graphical solution? If so,explain how. b.Explain how a drum-buffer-rope system would work for Baldwin.

If inventory consists of goods produced internally,what are the inventory-related costs?

How does JIT reduce lead times to meet delivery dates?

The ordering of small,frequent orders minimizes which of the following costs?