Ch11pp
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This document contains 3 practice problems related to supply chain management. Problem 1 asks to determine the sales needed for a company that spends 70% on purchases and has a 6% profit to equal $1 in purchase savings. Problem 2 is similar but with 40% spent on purchases and 8% profit. Problem 3 considers shipping computer parts from Singapore via container ship or airfreight weighing holding costs and transportation costs.
![ANSWERS
Problem 1:
From Table 11.3, we see that this company would have to increase sales by
approximately $5.56
Problem 2:
From Table 11.3, we see that this company would have to increase sales by
approximately $2.94
Problem 3:
Cost via container ship:
[24 *
(.40* 75,000)
365
]+ 5,000 = (24*82.19) + 5,000 =1,972.56 + 5,000 = $6,972.56
Cost via airfreight:
[1*
(.40* 75,000)
365
]+ 8,000 = (1*82.19) +8,000 = 82.19 + 8,000 = $8,082.19
Therefore, use the container ship as it has a lower total cost.
2](https://image.slidesharecdn.com/ch11pp-150712135358-lva1-app6892/85/Ch11pp-2-320.jpg)
Ch11pp
- 1. Practice Problems: Chapter 11, Supply-Chain Management Problem 1: Determine the sales necessary to equal a dollar of savings on purchases for a company that has a net profit of 6% and spends 70% of its revenues on purchases. Problem 2: Determine the sales necessary to equal a dollar of savings on purchases for a company that has a net profit of 8% and spends 40% of its revenues on purchases. Problem 3 Phil Carter, President of Carter Computer Components, Corp. has the option of shipping computer transformers from its Singapore plant via container ship or airfreight. The typical shipment has a value of $75,000. A container ship takes 24 days and costs $5,000; airfreight takes 1 day and costs $8,000. Holding cost is estimated to be 40% in either case. How should shipments be made? 1
- 2. ANSWERS Problem 1: From Table 11.3, we see that this company would have to increase sales by approximately $5.56 Problem 2: From Table 11.3, we see that this company would have to increase sales by approximately $2.94 Problem 3: Cost via container ship: [24 * (.40* 75,000) 365 ]+ 5,000 = (24*82.19) + 5,000 =1,972.56 + 5,000 = $6,972.56 Cost via airfreight: [1* (.40* 75,000) 365 ]+ 8,000 = (1*82.19) +8,000 = 82.19 + 8,000 = $8,082.19 Therefore, use the container ship as it has a lower total cost. 2