Details:
Complete problems 11.5, S11.4, S11.9, S11.15, 12.1, 12.4, 12.13, and 12.17 in the textbook.

Submit one Excel file. Put each problem result on a separate sheet in your file.

11.5 Baker Mfg. Inc. (see Table 11.9) wishes to compare
its inventory turnover to those of industry leaders, who have turnover
of about 13 times per year and 8% of their assets invested in
inventory.
a) What is Baker’s inventory turnover?
b) What is Baker’s percent of assets committed to inventory?
c) How does Baker’s performance compare to the industry
leaders?
TABLE 11.9 For Problems 11.5 and 11.6
ARROW DISTRIBUTING CORP.
Net revenue $16,500
Cost of sales $13,500
Inventory $ 1,000
Total assets $ 8,600
BAKER MFG. INC.
Net revenue $27,500
Cost of sales $21,500
Inventory $ 1,250
Total assets $16,600

S11.4 Johnson Chemicals is considering two options for
its supplier portfolio. Option 1 uses two local suppliers. Each has
a “unique-event” risk of 5%, and the probability of a “super-event”
Problems
that would disable both at the same time is estimated to be 1.5%.
Option 2 uses two suppliers located in different countries. Each has
a “unique-event” risk of 13%, and the probability of a “super-event”
that would disable both at the same time is estimated to be 0.2%.
a) What is the probability that both suppliers will be disrupted
using option 1?
b) What is the probability that both suppliers will be disrupted
using option 2?
c) Which option would provide the lowest risk of a total
shutdown?

S11.9 Consider a three-firm supply chain consisting of a
retailer, manufacturer, and supplier. The retailer’s demand over
an 8-week period was 100 units each of the first 2 weeks, 200 units
each of the second 2 weeks, 300 units each of the third 2 weeks, and
400 units each of the fourth 2 weeks. The following table presents
the orders placed by each firm in the supply chain. Notice, as is
often the case in supply chains due to economies of scale, that total
units are the same in each case, but firms further up the supply
chain (away from the retailer) place larger, less frequent, orders.
WEEK RETAILER MANUFACTURER SUPPLIER
1 100 200 600
2 100
3 200 400
4 200
5 300 600 1400
6 300
7 400 800
8 400
Recall that the sample variance of a data set can be found by
using the VAR.S function in Excel or by plugging each x value of
the data set into the formula: Variance =
g(x - x)2
(n - 1)
, where x is
the mean of the data set and n is the number of values in the set.
a) What is the bullwhip measure for the retailer?
b) What is the bullwhip measure for the manufacturer?
c) What is the bullwhip measure for the supplier?
d) What conclusions can you draw regarding the impact that
economies of scale may have on the bullwhip effect?

S11.15 Monczka-Trent Shipping is the logistics vendor
for Handfield Manufacturing Co. in Ohio. Handfield has daily
shipments of a power-steering pump from its Ohio plant to an
auto assembly line in Alabama. The value of the standard shipment
is $250,000. Monczka-Trent has two options: (1) its standard
2-day shipment or (2) a subcontractor who will team drive
overnight with an effective delivery of one day. The extra driver
costs $175. Handfield’s holding cost is 35% annually for this kind
of inventory.
a) Which option is more economical?
b) What production issues are not included in the data presented?

12.1 L. Houts Plastics is a large manufacturer of injectionmolded
plastics in North Carolina. An investigation of the company’s
manufacturing facility in Charlotte yields the information
presented in the table below. How would the plant classify these
items according to an ABC classification system? PX
L. Houts Plastics’ Charlotte Inventory Levels
ITEM CODE # AVERAGE INVENTORY (UNITS) VALUE ($/UNIT)
1289 400 3.75
2347 300 4.00
2349 120 2.50
2363 75 1.50
2394 60 1.75
2395 30 2.00
6782 20 1.15
7844 12 2.05
8210 8 1.80
8310 7 2.00
9111 6 3.00

12.4 Lindsay Electronics, a small manufacturer of electronic
research equipment, has approximately 7,000 items in its
inventory and has hired Joan Blasco-Paul to manage its inventory.
Joan has determined that 10% of the items in inventory are
A items, 35% are B items, and 55% are C items. She would like to
set up a system in which all A items are counted monthly (every 20
working days), all B items are counted quarterly (every 60 working
days), and all C items are counted semiannually (every 120
working days). How many items need to be counted each day?

12.13 Joe Henry’s machine shop uses 2,500 brackets during
the course of a year. These brackets are purchased from a supplier
90 miles away. The following information is known about
the brackets:
Annual demand: 2,500
Holding cost per bracket per year: $1.50
Order cost per order: $18.75
Lead time: 2 days
Working days per year: 250
a) Given the above information, what would be the economic
order quantity (EOQ)?
b) Given the EOQ, what would be the average inventory? What
would be the annual inventory holding cost?
c) Given the EOQ, how many orders would be made each year?
What would be the annual order cost?
d) Given the EOQ, what is the total annual cost of managing the
inventory?
e) What is the time between orders?
f) What is the reorder point (ROP)?

12.17 Radovilsky Manufacturing Company, in Hayward,
California, makes flashing lights for toys. The company operates
its production facility 300 days per year. It has orders for about
12,000 flashing lights per year and has the capability of producing
100 per day. Setting up the light production costs $50. The cost of
each light is $1. The holding cost is $0.10 per light per year.
a) What is the optimal size of the production run?
b) What is the average holding cost per year?
c) What is the average setup cost per year?
d) What is the total cost per year, including the cost of the
lights?