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Chapter 3: 1OQ(b) (page 345)
Question: What is the cost to inspect each unit?
Answer
A sum of money must be paid or spent to acquire or gain anything.
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Explain the relationship between quality and productivity under the lean philosophy.
The owner of a large machine shop has just finished its financial analysis from the prior fiscal year. Following is an excerpt from the final report:
a. Compute the inventory turnover ratio (ITR).
b. Compute the weeks of supply (WS).
Question:U.S. Air filter has hired you as a supply chain consultant. The company makes air filters for residential heating and air-conditioning systems. These filters are made in a single plant located in Louisville, Kentucky, in the United States. They are distributed to retailers through wholesale centers in 100 locations in the United States, Canada, and Europe. You have collected the following data relating to the value of inventory in the U.S. Air filter supply chain:
Quarter 1 (January through March) | Quarter 2 (April through June) | Quarter 3 (July through September) | Quarter 4 (October through December) | |
Sales (total quarter): | ||||
United States | 300 | 350 | 405 | 375 |
Canada | 75 | 60 | 75 | 70 |
Europe | 30 | 33 | 20 | 15 |
Cost of goods sold (total quarter) | 280 | 295 | 340 | 350 |
Raw materials at the Louisville plant (end-of-quarter) | 50 | 40 | 55 | 60 |
Work-in-process and finished goods at the Louisville plant (end-of-quarter) | 100 | 105 | 120 | 150 |
Distribution centre inventory (end-of-quarter): | ||||
United States | 25 | 27 | 23 | 30 |
Canada | 10 | 11 | 15 | 16 |
Europe | 5 | 4 | 5 | 5 |
a. What is the average inventory turnover for the firm?
b. If you were given the assignment to increase inventory turnover, what would you focus on? Why?
c. The company reported that it used $500M worth of raw material during the year. On average, how many weeks of supply of raw material are on hand at the factory?
Meritor is so pleased with the outcome from previous suggestions that the consultants are invited back for more work. The consultants now suggest a more complete robotic automation of the making of muffler assemblies and also a reduction in container size to eight per container. Meritor implements these suggestions and the result is that the muffler assembly fabrication cell now averages approximately 32 assemblies per hour, and the catalytic converter assembly cell can now respond to an order for a batch of catalytic converters in one hour. The safety stock remains at 12.5 percent. How many kanban cards are needed?
What are the roles of suppliers and customers in a lean system?
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