Company products is blood pressure testing kit

Assignment Help Operation Management
Reference no: EM132136078

PLEASE SHOW ALL WORK

Please read the following case of UPD Manufacturing and write the required report.

UPD Manufacturing produces a range of healthcare appliance for hospital as well as for home use. The company has experienced a steady demand for its products, which are highly regarded in the healthcare field. Recently the company has undertaken a review of its inventory ordering procedures as part of a larger effort to reduce costs.

One of the company’s products is a blood pressure testing kit. UPD manufactures all of the components for the kit in-house except for the digital display unit. The display units are ordered at six week intervals from the supplier. This ordering system began about five years ago, because the supplier insisted on it. However, that supplier was bought out by another supplier about a year ago, and a six week ordering requirement is no longer in place. Nonetheless, UPD has continued to use the six week ordering policy. According to the purchasing manager Tom Chambers, “unless somebody can give me a reason for changing, I am going to stick with what we have been doing. I don’t have time to reinvent the wheel.”

Further discussions with Tom reviewed a cost of $30 to order and receive a shipment of display units from the supplier. The company assembles 80 kits a week. Also, information from Sara James, in Accounting, indicated a weekly carrying cost of $0.12 for each display unit.

The supplier has been quiet reliable with deliveries; orders are received five working days (one week) after they are faxed to the supplier. Tom indicated that as far as he was concerned, lead-time variability is virtually nonexistent.

Questions

1) Would using an order interval other than every six weeks reduce costs? If so, what order interval would be best and what order size would that involve?

2) Would you recommend changing to the optimal order interval? Explain.

Please remember to provide the following in your report

(1) Compute the quantity of the two different ordering methods: Fixed order interval (FOI) and EOQ method. Please note that the FOI method here does not include the variability factor/safety stock. Then compute the total cost of ordering using each method.

(2) Make your recommendation to UPD Manufacturing based on your computation results.

Reference no: EM132136078

Identify 3 key strategic issues facing the organisation

Identify 3 key strategic issues facing the organisation with a clear explanation of why they are "strategic" Analyse fully the resources and key capabilities of the organisati

The services dominant logic (sdl) is a radical change in how

The services dominant logic (SDL) is a radical change in how we conceptualise exchange. Does the SDL require us to rethink how we practice organisational buying and industrial

Which kind of hotel manager do you agree with

Which kind of hotel manager do you agree with-the ones that do not wish to limit themselves given their business is good for all three segments of travelers, or the London fir

Discuss and review assumptions and budget parameters

Discuss and review assumptions and budget parameters - review these during the budget process as needed and Identify any financial risks and incorporate protection strategies

Discuss the development of the philosophy

ACC11416 Building High Performance Organisations Assessment. Discuss the development of the philosophy, principles and process of lean in the context of its contribution to m

Explain how you will integrate lean operations

Identify the tools, techniques, and technologies used in the design of your production plan and explain how you will integrate lean operations and lean services in your produc

Summarize the advantages and disadvantages of transportation

Think about the criteria a transportation manager might use when making strategic transportation decisions. In a PowerPoint presentation summarize the advantages and disadva

Conduct a workplace survey about conflict

Conduct a workplace survey about conflict in the workplace based on Conflict in Teams in Thompson text -  Interview at least two supervisory level persons in the organization

Reviews

Write a Review

 
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd