Exam 20: 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 labor hours and 400 machine hours are available for production. Time requirements to produce one unit of X and Y are as follows: -What is the constraint on machine hours for Tiffany Manufacturing Company?

Following is information pertaining to material that is used in the assembly of automobiles: Required:

The theory of constraints uses the following five steps to achieve its goal of improving organizational performance: What is the correct order for performing these steps?

Figure 20 -2 Seal Company has the following information available concerning one of its inventory items: -Refer to Figure 20-2.If there is a delay in shipping the item, approximately how many days can be covered by the safety stock?

If the objective is to maximize profits in a linear programming problem, the coefficients of the variables in the objective function should be the

Tiffany Manufacturing Company produces X and Y with contribution margins per unit of $10 and $90, respectively.Only 200 labor hours and 400 machine hours are available for production. Time requirements to produce one unit of X and Y are as follows: -What is the objective function to maximize profits for Tiffany Manufacturing Company?

Cardinal Dry Cleaners has 400 hours a week available to use in dry cleaning or laundry.Four thousand inches of hanging space is available.The average item that is dry cleaned takes six inches of hanging space, whereas laundry items take up only three inches of hanging space.The contribution margin for laundry items averages $3.50; dry cleaned items average $6.50.Fifty items can be washed per hour, whereas only twenty can be dry cleaned. Required:

One of the traditional reasons for holding inventory is to avoid shutdowns due to unavailability of materials.The JIT solution is to

Which of the following is NOT an opportunity cost associated with inventory management?

Figure 20 -2 Seal Company has the following information available concerning one of its inventory items: - Refer to Figure 20-2.The reorder point for the inventory item is

The following information is available for Walters Furniture Company, which sells two products: -There are 200 hours available in the plant and 200 square feet of metal available per operating period. The constraint equation representing processing time available is

Margaret Company has an economic order quantity for item B of 100 units.The annual demand for the product is 1,400 units, and the unit carrying cost per year is $7.What is the cost of placing an order?

JIT purchasing is done using

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

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 forty workers who work eight 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. Required:

One of the traditional reasons for holding finished goods inventories is to ensure a firm's ability to meet delivery dates.The JIT solution is to

Figure 20 - 5 The following information is available for Wilson Trailer Company, which sells two products: There are 100 hours available in the plant and 75 square feet of vinyl available per operating period. - Refer to Figure 20-5.The constraint equation representing the materials available for the production processes is

If inventory consists of goods purchased from an outside supplier, the inventory-related costs are

Hershey Company uses quantitative models for inventory control.For canned syrup, the annual demand is 8,000 cases.The supplier is 500 miles away, and it usually takes three days to get an order filled.The average order costs $16 to process and the carrying cost per case is $40 per year.The store is open 300 days a year. Required:

Figure 20 - 1 Jan's Candle Company manufactures candles.The company buys wax in 100-pound containers that cost $15 each.The company uses 20,000 containers per year, and usage occurs evenly throughout the year.The average cost to carry a 100-pound container in inventory per year is $2, and the cost to place an order is $10.The company works 250 days per year. - Refer to Figure 20-1.The economic order quantity (rounded) is