14) LO 11-03 Main Tradeoffs in Making Strategic Decisions: Which of the follow s
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14) LO 11-03 Main Tradeoffs in Making Strategic Decisions: Which of the follow statements about supply chain decisions is TRUE? A) Tactical decisions are not as important as strategic decisions. e the right level of flexibility to counteract the amount of variability in a supply chain. C) All supply chains face the same amount of variability. D) Supply chain decisions are shout selecting the right level of flexibility to counteract the amount of variability in a supply chain 15) LO 12-01 Economic Order Quantity and Performance Measures with the EOO Model: Company C&A; sells 600 bottles of a dietary supplement per week at $100 pe bottle. The supplement is ordered from a supplier who charges Company C&A; s30 pe order and S 50 per bottle. Company C&A;'s annual holding cost percentage is 40%. Assume Company C&A; operates 50 weeks in a year. Whst order quantity minimizes Company C&A;'s total ordering and holding cost per year? A) 42 C) 30 D) 300 16) LO 12-01 Economie Order Quantity and Performance Measures with the EOQ Model: Bakery A uses 60 bags of flour each moeth. The flour is purchased from a supplier for a price of S80 per bag and an ordering cost of $20 per order. Bakery A's annual inventory holding cost percentage is 40%. If Bakery A chooses to use the economic order quantity for flour purchases, what will be the total of its holding and ordering costs per year? A) S138 B) $277 C) 5960 D) $480 17) LO 13-01 Use the Newsvendor Model - Overage Costs: Bakery A sells bread for $2 per loaf that costs $0.50 per loaf to make. Bakery A gives an 80% discount for its bread at the end of the day. What is the overage cost? A) S0.40 B) 51.50 C) $0.50 D) S0.10 18) LO 13-01 Use the Newsvendor Model- Underage Costs: Bakery A sells bread for $2 per loaf that costs $0.50 per loaf to make. Bakery A gives an 80% discount for its bread at the end of the day, What is the underage cost? A) S0.50 B) S0.40 C) S0.10 D) $1.50Explanation / Answer
14.
D.
Supply chain decisions bring right amount of flexibility in the supply chain, so that the variation is countered correctly.
15.
D.300
Working note:
EOQ = (2*annual demand*ordering cost/holding cost)^.5
EOQ = (2*600*50*30/(.4*50))^.5
EOQ = 300
16.
C.$960
Working note:
EOQ = (2*annual demand*ordering cost/holding cost)^.5
EOQ = (2*12*60*20/(.4*80))^.5
EOQ = 30 bags
Now,
Annual ordering and holding cost = annual ordering cost + annual holding cost
Annual ordering and holding cost = (12*60/30)*20 + (30/2)*(.4*80)
Annual ordering and holding cost = $960
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