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
In many ways teaching and medical care have many similarities. This study of leadership style during innovation efforts has a lot to say about leadership in a time of change in hea

A firm uses three machines in the manufacturing of three products: Each unit of product 1 requires three hours on machine 1, two hours on machine 2 and one hour on machine 3.

Service Blueprinting - Process Design Most of the recording techniques described so far had their origins in the heyday of scientific management. Service blueprinting is much

1. Define productivity both as a mathematical ratio and as a systems diagram?  2. Outline how the productivity of an organisation may be improved.  3. Discuss the factors aff

You have a lease on an oil and gas property with 87.5% NRI that delivers your firm annual profits of $400,000 for five years, with equal production in each year (you will need to t

1. Using the terms from this chapter, how would you characterize the teams at ICU Medical Inc.? What are some advantages and disadvantages of giving teams a lot of autonomy to make

A single machine work center has five jobs assigned to it. They are labelled, in the order of their arrival in the shop, as jobs A, B, C, D and E. The work center may work on only

what are the factors to be considered when making location decisions

1. Since the creation of DHS, the Postal Service is no longer in the business of fighting computer-generated crimes such as child pornography. True or False 2. During the first era

Compare a Utilitarian and a Libertarian view on the importance and enforcement of consumer rights.