A colleague tells you that the inventory is incurring extra costs and hence all inventories and warehouses need to be removed. Do you agree? Justify your answer.
> A production worker seems to know nothing about the different levels of product customization. As his supervisor, briefly explain the four levels of customization starting from the least to greatest.
> Between 1964 and 1966, Ford made more than 1 million Mustangs. Today car collectors are spending tens of thousands of dollars to restore to “like new” vintage Mustangs that originally sold for around $3,000. What types of manufacturing processes do you t
> At many college athletic events, you can find plastic drink cups with the school logo printed on it. Twenty years ago, these cups came molded in a variety of colors. Now nearly all the cups are white with only the printed logos containing any color. Use
> What are the characteristics of make-to-stock products? Can you give one or two examples of this product from daily life?
> Do you think the manufacturing and service process decisions are critical to a firm’s operations and supply chain management? Justify your answer.
> What are some of the benefits of including suppliers in the product development process? Can you think of any risks?
> Which type of product development effort would be better suited to concurrent engineering: a radically new product involving cutting-edge technologies or the latest version of an existing product? Why?
> Consider the phases of product and service development shown in Table 15.1. Why is it important to include customers early in the development process? Table 15.1:
> Consider some of the dimensions of product design that we listed as important to operations and supply chain managers. Are these dimensions more or less important than whether the product or service meets the customers’ needs? Can you think of situations
> We talked about concurrent engineering as an alternative to sequential development. What are the advantages of concurrent engineering? Under what circumstances might sequential development be preferable?
> Different customers can perceive the value of the same product or service very differently. Explain how this can occur. What are the implications for developing successful operations and supply chain strategies?
> In this chapter, we described several approaches to product design, including parts standardization and modularity. How do these two approaches relate to the dimensions of product design described earlier in the chapter?
> Why do you think it is important for project planners to revisit the network diagram as time goes on?
> What are the main advantages of using a network-based approach to project management rather than a Gantt chart? Under what circumstances might a Gantt chart be preferable to a network-based approach?
> In what businesses would you expect project management skills to be most important? In what businesses would you expect them to be least important?
> Visit the Web site for the Project Management Institute, at www.pmi.org. What types of educational material are available for project managers? What types of professional certification programs are available? What do you think a professional project mana
> In what ways might a firm’s suppliers improve or undermine the firm’s Lean efforts? Can you think of any examples from the chapter that illustrate this idea?
> We noted in the chapter that kanban is not a planning tool but a control mechanism. What did we mean by that? How does the MRP/kanban example in Example 13.4 illustrate the point?
> Comment on the relationship between quality management (Chapter 5) and Lean. Are they the same thing, or are there some differences?
> Even though waiting is a form of waste, does it always make sense to eliminate it? (Hint: Recall our discussion of waiting line theory in Chapter 6, and the relationship between resource levels and waiting times.)
> One of your friends asks you about the difference between necessary transportation and unnecessary transportation, based on the lean perspective on waste. Can you explain what they are? Illustrate your answer with examples.
> Go to the Web and see if you can find out the mission statement of a logistics and supply chain related company. From the said mission statement, can you find out why the organization exists? What are the core values that are important to the organizati
> Consider Figure 12S.1. Some people have argued that companies need to put in place information systems that address routine decision making and transactional requirements prior to tackling higher-level planning and decision making. Others strongly disagr
> What is the difference between an information flow and an information system? Do information systems always have to be computerized? Why?
> Explain in your own words how tools such as master scheduling, MRP, and DRP can be used to coordinate activity up and down a supply chain. For example, what information might we share with our customers? Our suppliers? What information might we want from
> What are the benefits of having a formal master scheduling process? What could happen to firms that don’t follow some of the basic rules of master scheduling?
> Master scheduling, MRP, and DRP have been around for a long time, but too many companies still do an inadequate job of using these tools. How can this be? In particular, what role do you think organizational discipline plays in making these tools work?
> What are the benefits of using material requirements planning (MRP)?
> The JIT/lean production movement has long argued that firms should: a. Maximize their process flexibility so that ordering costs are minimized; b. Stabilize demand levels; c. Shrink lead times as much as possible; and d. Assign much higher holding co
> In a supply chain, what are the pros and cons of pushing inventory downstream, closer to the final customer? How might modular product designs (Chapter 15) make it more profitable for companies to postpone the movement of inventory down the supply chain?
> Early in the chapter, we argued that “no single trend has done more to change the nature of business than the Internet.” Can you think of an example about how the Internet and its resources can be used in operations or supply chain management?
> Which of the following are independent demand inventory items? Dependent demand inventory items? a. Ice cream at McDonalds b. Bicycle seats in a bicycle factory c. An iPhone 6 Plus at an Apple store d. French fries at KFC e. Potatoes at a plant that
> In your own words, what is an inventory driver? What is the difference between a controllable inventory driver and an uncontrollable inventory driver? Give examples.
> You hear someone comment that any inventory is a sign of waste. Do you agree or disagree? Can managers simultaneously justify holding inventories and still seek out ways to lower inventory levels?
> What are the advantages to a firm of coordinating its S&OP process with key supply chain partners? What are the potential drawbacks?
> Why has the implementation of S&OP been described as a three-phase process? Briefly explain the three different phases.
> Services, in general, cannot put “products” in inventory to be consumed at some later time. How does this limit service firms’ S&OP alternatives?
> In general, under what conditions might a firm favor a level production plan over a chase plan? A chase production plan over a level plan?
> How does S&OP differ from strategic capacity planning? From detailed planning and control? What role does S&OP play in the overall planning activities of an organization?
> Some people have argued that the process of developing a sales and operations plan is as important as the final numbers. How could this be?
> If forecasting is so important, why do firms look to approaches such as CPFR as a way to reduce the need for forecasting?
> In this chapter, we defined a supply chain as a network of manufacturers and service providers that work together to create products or services needed by end users. What are some of the different supply chains that support a product such as the Apple iP
> Explain the differences in using linear regression to develop a time series forecasting model and a causal forecasting model.
> What are the advantages of having computer-based forecasting packages handle the forecasting effort for a business? What are the pitfalls?
> Are time series forecast techniques such as moving average and exponential smoothing models well suited to developing forecasts for multiple periods into the future? Why or why not?
> What is a hub-and-spoke system? How does it differ from consolidation and cross-docking?
> Can you think of the different challenges that a company may face when incorporating a reverse logistics system into the overall logistics strategy?
> What are landed costs? Should we consider landed costs in more detail when participating in international supply chain management?
> Can a shipping company that does not actually own a ship deliver cargoes on behalf of their shippers? Explain.
> “Transportation and warehousing are the two major functions of logistics.” Do you agree with this proposition? Explain.
> In the chapter, we suggested that advanced information systems will automate some of the more routine purchasing activities. What are the implications for purchasing professionals? Is this a good time to join the purchasing profession? Explain.
> One of your co-workers tells you that operations and supply chain management are both related to freight movement, and has nothing to do with passenger transportation. Do you agree? Justify your answer.
> Under what conditions might a company prefer to negotiate rather than use competitive bidding to select a supplier?
> Consider the cafeteria services available at a university. In many cases, these services are outsourced to a private firm. Use Tables 7.6 and 7.7 as guides to explain why this is the case. In what quadrant would such services be positioned when determini
> Though simulations are used to imitate the operation of a real-world process or system over time, they have a number of disadvantages. Identify their advantages as well as their disadvantages.
> Is it true to say that the waiting line for a bank with constant service time will have a longer waiting time than a bank with irregular service time, assuming all other things, including time between arrivals, are the same? Why or why not?
> A manufacturer takes raw material from a supplier, processes it using a single manufacturing step, and then sells it to its customers. Suppose the manufacturer decides to double the capacity of the manufacturing step. Under what conditions will throughpu
> What are the relationships among learning, productivity, and effective capacity? What are the pros and cons of using learning curves to estimate future resource requirements?
> Assume that you are the operations manager of a department store. Is it logical for cashiers to be fully engaged all the time in order to keep the customers’ waiting time to a minimum when the latter usually arrive at random intervals? Explain your answe
> Who do you think would benefit more from a “virtual supply chain” capacity strategy—a small start-up firm with few resources or an older, more established company? Why? What are the risks associated with such a strategy?
> What kind of capacity strategy—lead, lag, or match— would you expect a toy targeted for the Christmas period to adopt? What about a public employment agency? Why?
> “As a matter of fact, an environment supporting standardized products will usually have an easier time managing capacity than an environment supporting customized products.” Is this proposition true? Justify your answer.
> Consider the simplified Anheuser-Busch supply chain shown in Figure 1.2. Is Alcoa really the first entity in the supply chain? What other suppliers would AnheuserBusch have? What information should be shared among companies in the supply chain?
> The ledger of Tyler Lambert and Jayla Yost, attorneys-at-law, contains the following accounts and balances after adjustments have been recorded on December 31, 20Y3: The balance in Yost’s capital account includes an additional investm
> The ledger of Tyler Lambert and Jayla Yost, attorneys-at-law, contains the following accounts and balances after adjustments have been recorded on December 31, 20Y3: The balance in Yost’s capital account includes an additional investm
> Ecker Company reports $2,700,000 of net income for 2015 and declares $388,020 of cash dividends on its preferred stock for 2015. At the end of 2015, the company had 678,000 weighted-average shares of common stock. 1. What amount of net income is availabl
> Rugged Sports Enterprises LP is organized as a limited partnership consisting of two individual partners: Hockey LP and Football LP. Both partners separately operate a minor league hockey team and a semipro football team. Compute partner return on equity
> The partners in the Biz Partnership have agreed that partner Mandy may sell her $100,000 equity in the partnership to Brittney, for which Brittney will pay Mandy $85,000. Present the partnership’s journal entry to record the sale of Mandy’s interest to B
> Prepare journal entries to record the following transactions involving the short-term securities investments of Krum Co., all of which occurred during year 2015. a. On August 1, paid $450,000 cash to purchase Houtte’s 9% debt securities ($450,000 princip
> Next to the following list of eight characteristics of business organizations, enter a brief description of how each characteristic applies to general partnerships. Characteristic Application to General Partnerships I. Life 2. Owners' liability 3. L
> Valdez issues $450,000 of 13%, four-year bonds dated January 1, 2015, that pay interest semiannually on June 30 and December 31. They are issued at $493,608, and their market rate is 10% at the issue date. Required 1. Prepare the January 1, 2015, journa
> Flagstaff Systems issues bonds dated January 1, 2015, that pay interest semiannually on June 30 and December 31. The bonds have a $90,000 par value and an annual contract rate of 12%, and they mature in five years. Required For each of the following thr
> Braun Company signs a five-year capital lease with Verdi Company for office equipment. The annual year-end lease payment is $20,000, and the interest rate is 10%. Required 1. Compute the present value of Braun’s lease payments. 2. Prep
> Soltech Company’s common stock is currently selling on a stock exchange at $90 per share, and its current balance sheet shows the following stockholders’ equity section. Required (Round per share amounts to cents.) 1
> The equity sections from Hovo Corporation’s 2015 and 2016 balance sheets follow. The following transactions and events affected its equity during year 2016. Feb. 15 Declared a $0.40 per share cash dividend, date of record five days
> At December 31, the end of Chilton Communication’s third quarter, the following stockholders’ equity accounts are reported: In the fourth quarter, the following entries related to its equity are recorded: Required
> Balthus Corp. reports the following components of stockholders’ equity on December 31, 2015: It completed the following transactions related to stockholders’ equity in year 2016: Jan. 10 Purchased 40,000 shares of i
> Weiss Company is incorporated at the beginning of this year and engages in a number of transactions. The following journal entries impacted its stockholders’ equity during its first year of operations. Required 1. Explain the transact
> Lasure, Ramirez, and Toney, who share income and loss in a 2:1:2 ratio, plan to liquidate their partnership. At liquidation, their balance sheet appears as follows. Required Prepare journal entries for (a) the sale of equipment, (b) the allocation of i
> Part 1. Gibbs, Cook, and Chan are partners and share income and loss in a 5:1:4 ratio. The partnership’s capital balances are as follows: Gibbs, $606,000; Cook, $148,000; and Chan, $446,000. Gibbs decides to withdraw from the partnership, and the partner
> Hunter, Folgers, and Tulip have been partners while sharing net income and loss in a 5:3:2 ratio. On January 31, the date Tulip retires from the partnership, the equities of the partners are Hunter, $150,000; Folgers, $90,000; and Tulip, $60,000. Present
> Sally Cook, Lin Xi, and Ken Schwartz formed the CXS Partnership by making capital contributions of $144,000, $216,000, and $120,000, respectively. They predict annual partnership net income of $240,000 and are considering the following alternative plans
> Mark Albin, Roland Peters, and Sam Ramsey invested $164,000, $98,400, and $65,600, respectively, in a partnership. During its first calendar year, the firm earned $270,000. Required Prepare the entry to close the firm’s Income Summary account as of its
> Maria Bell and J.R. Green are forming a partnership to which Bell will devote one-third time and Green will devote full time. They have discussed the following alternative plans for sharing income and loss: (a) in the ratio of their initial capital inves
> Doering Company, a U.S. corporation with customers in several foreign countries, had the following selected transactions for 2015 and 2016. 2015 Apr. 8 Sold merchandise to Salinas & Sons of Mexico for $5,938 cash. The exchange rate for pesos is $0.10
> Stoll Co.’s long-term available-for-sale portfolio at December 31, 2014, consists of the following. Stoll enters into the following long-term investment transactions during year 2015. Jan. 29 Sold 3,500 shares of Company B common stoc
> Selk Steel Co., which began operations on January 4, 2015, had the following subsequent transactions and events in its long-term investments. 2015 Jan. 5 Selk purchased 60,000 shares (20% of total) of Kildaire’s common stock for $1,560,000. Oct. 23 Kild
> Grass Security, which began operations in 2015, invests in long-term available-for-sale securities. Following is a series of transactions and events determining its long-term investment activity. 2015 Jan. 20 Purchased 1,000 shares of Johnson & Johnson a
> Rose Company had no short-term investments prior to year 2015. It had the following transactions involving short-term investments in available-for-sale securities during 2015. Apr. 16 Purchased 4,000 shares of Gem Co. stock at $24.25 per share plus a $18
> Carlsville Company, which began operations in 2015, invests its idle cash in trading securities. The following transactions are from its short-term investments in trading securities. 2015 Jan. 20 Purchased 800 shares of Ford Motor Co. at $26 per share pl
> Refer to the bond details in Problem 14-4A. Required 1. Compute the total bond interest expense over the bonds’ life. 2. Prepare an effective interest amortization table like the one in Exhibit 14B.2 for the bonds’ li
> The Struter Partnership has total partners’ equity of $510,000, which is made up of Main, Capital, $400,000, and Frist, Capital, $110,000. The partners share net income and loss in a ratio of 80% to Main and 20% to Frist. On November 1, Madison is admitt
> Refer to the bond details in Problem 14-5A. Required 1. Prepare the January 1, 2015, journal entry to record the bonds’ issuance. 2. Determine the total bond interest expense to be recognized over the bonds’ life. 3.
> At the end of the current year, the following information is available for both Pulaski Company and Scott Company. Required 1. Compute the debt-to-equity ratios for both companies. 2. Comment on your results and discuss the riskiness of each company&ac
> On November 1, 2015, Norwood borrows $200,000 cash from a bank by signing a five-year installment note bearing 8% interest. The note requires equal total payments each year on October 31. Required 1. Compute the total amount of each installment payment.
> Legacy issues $325,000 of 5%, four-year bonds dated January 1, 2015, that pay interest semiannually on June 30 and December 31. They are issued at $292,181 and their market rate is 8% at the issue date. Required 1. Prepare the January 1, 2015, journal e
> Ellis issues 6.5%, five-year bonds dated January 1, 2015, with a $250,000 par value. The bonds pay interest on June 30 and December 31 and are issued at a price of $255,333. The annual market rate is 6% on the issue date. Required 1. Calculate the total
> Refer to the bond details in Problem 14-2A, except assume that the bonds are issued at a price of $4,895,980. Required 1. Prepare the January 1, 2015, journal entry to record the bonds’ issuance. 2. For each semiannual period, compute
> Hillside issues $4,000,000 of 6%, 15-year bonds dated January 1, 2015, that pay interest semiannually on June 30 and December 31. The bonds are issued at a price of $3,456,448. Required 1. Prepare the January 1, 2015, journal entry to record the bonds&a
> Ike issues $180,000 of 11%, three-year bonds dated January 1, 2015, that pay interest semiannually on June 30 and December 31. They are issued at $184,566. Their market rate is 10% at the issue date. Required 1. Prepare the January 1, 2015, journal entr
