Explain matching supply with demand, Operation Management

From "Matching Supply with Demand" Cachon/Terwiesch

(Inventory Cost) A manufacturing company producing medical devices reported $60,000,000 in sales over the last year. At the end of the same year, the company had $20,000,000 worth of inventory of ready-to-ship devices.

a. Assuming the units in inventory are valued (based on COGS) at $1000 per unit and are sold for $2000 per unit, how fast does the company turn it's inventory? The company uses a 25 percent per year cost of inventory. That is, for the hypothetical case that one unit of $1000 would sit exactly one year in inventory, the company charges its operations division a $250 inventory cost.

b. What - in absolute terms- is the per unit inventory cost for a product that costs $1000?

Posted Date: 2/17/2014 2:06:21 AM | Location : United States

Related Discussions:- Explain matching supply with demand, Assignment Help, Ask Question on Explain matching supply with demand, Get Answer, Expert's Help, Explain matching supply with demand Discussions

Write discussion on Explain matching supply with demand
Your posts are moderated
Related Questions
What are policy and operative decisions? Policy decisions are very significant, they are taken by top management, and they have a long-term impact and mostly relate to fundamen

Company A finds profit at $15,000 inadequate for expanding business. The bank is insisting on an improved profit picture prior to approval of a loan for some new equipment. Company

what happens if line balance doesnt exist?

List the operation involved in any buying and selling business?

A nursing home contracts with an HMO for skilled nursing care at $2.00 PMPM. If costs are expected to average $120 per day, what is the maximum utilization of days per 1,000 member

Calculate number of workers needed for each department to produce 2000 units per day and complete the table below to assist you in answering questions e.)รจ?j.). (e) What is the tot

any real problem may be self problem apply the system approach model to develop the appropriate solution for this problem

You know that our average weekly sales are $2,500 and the flow time is half day. Surely with this information, you should have no problem maintaining an inventory level of $400 to

As OB practitioners we know that emotions form preferences before we consciously evaluate those choices and this impacts the quality of the decisions made at the company. The presi