uestion 7 2 points Warehouse reduces transportation cost by Consolidating small
ID: 434214 • Letter: U
Question
uestion 7 2 points Warehouse reduces transportation cost by Consolidating small shipments from a number of suppliers in the same peographic area O Performing processing, light manufacturing, assembly and labeling advities Oftering market presence. O Matching on-hand inventory to customer orders. uestion 8 2 points Save Answe A firm is evaluatng whether it should produce a part in-house or purchasing from a supplier To produce the part in-house, it needs to invest $50,000 in the equipment and the cost of producing the part is $10 each the firm buys the part trom the supplier the cost is $30 each. What is the breakeven point? O 2000 units O 2500 units O 3000 units 3500 units estion 9 2 points Save Answe A company is considenng to increase the number of warehouses in the country from 3 to 6 To maintain the same level of product availablity which of the tollowing statement regarding the s afety stock is true? O No change on the totai safety stock level O The total safety stock needs to be doubled The total safety stock level will be increased by 40% The total safety stock level will be reduced by 20% Jestion 11 The bullwhip effect O tesuilts in oversced ot undersized capacit, poor customer sernce and lost profe o enhances the relationships between diterent stages of the supply chain O positiv?ly impacts performance at every stage resuts in improved on-time order deliveryExplanation / Answer
7.
Option 1 should be correct. Note that due to consolidation, the warehouse can send the small orders of multiple customers of a single location as a large single order and hence can realize economies of scale in transportation.
8.
Let the breakeven quantity be B. So, that, the cost of in-house production equals the cost of purchased parts.
or, 50,000 + 10 B = 30 B
or, B = 2,500 units
9.
Definitely, the safety stock level will be increased to capture the increased standard deviation due to reverse pooling. The number of warehouses is doubled. So, std. deviation will increase to the factor of SQRT(2) or 1.414. So, the increase will be 0.414 or 40% approximately.
10.
Option 1 is correct. It happens when there are capacity mismatches at various stages of the value chain. It results in poor customer service (due to high variability in inventory levels leading to unexpectedly high lead time to delivery) and hence lost profits as well (due to poor service and lost revenue and also due to high carrying cost).
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