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Sheet1
| MGSC | |||||||||||||||||||||
| 1. ABC Co. had a Net Revenue of $ | 7 | 5 | 6 | ||||||||||||||||||
| It had Inventory Investment of $12000 and Total Assets of $150,000. | |||||||||||||||||||||
| Find: | |||||||||||||||||||||
| a) Percentage of assets committed to inventory: | |||||||||||||||||||||
| b) Inventory turnover: | |||||||||||||||||||||
| c) Weeks of Inventory: | |||||||||||||||||||||
| 2. ABC Co. while reviewing its performance found the following: | |||||||||||||||||||||
| Current Year | Last year | ||||||||||||||||||||
| Cost of goods sold | $ | 8 | $750,000 | ||||||||||||||||||
| Inventory investment | $80,000 | $78,000 | |||||||||||||||||||
| a) Find weeks of supply for current and last year. | |||||||||||||||||||||
| b) Find inventory turnover for current and last year. | |||||||||||||||||||||
| c) Comment on performance this year compared to last year. | |||||||||||||||||||||
| 3. ABC Company is considering 3 foreign locations for outsourcing its call center. | |||||||||||||||||||||
| The following table gives weights for criteria used, score assigned for each criterion. | |||||||||||||||||||||
| The score range from 0 to 10, where 10 indicates excellence and zero very poor. | |||||||||||||||||||||
| Criterion | Weight | Country X | Country Y | Country Z | |||||||||||||||||
| Flexibility | 0.1 | 9 | |||||||||||||||||||
| Trustworthy | 0.3 | ||||||||||||||||||||
| Price | 0. | 4 | |||||||||||||||||||
| Delivery | 0.2 | ||||||||||||||||||||
| a) Computed weighted score for each criterion and total weighted score for each country. | |||||||||||||||||||||
| b) Which country should be selected? Explain. | |||||||||||||||||||||
| 4. ABC company wants to determine whether a component should be manufactured | |||||||||||||||||||||
| in-house or outsourced. The following table gives related data. | |||||||||||||||||||||
| In-house: Annual Fixed Cost, FIN = $80000 | |||||||||||||||||||||
| Variable cost/unit, VIN = $10 | |||||||||||||||||||||
| Out Source: | |||||||||||||||||||||
| Annual Fixed Cost, FOU = $120,000 | |||||||||||||||||||||
| Variable cost/unit, VOU = $5 | |||||||||||||||||||||
| Find: a) Break Even Annual Demand | |||||||||||||||||||||
| b) If annual demand is 10,000 units which option would you recomment? Explain. | |||||||||||||||||||||
| At this demand level the total cost will be the same for both | alternatives. | ||||||||||||||||||||
| If actual forecasted demand is greater than 5000 units, then outsourcing | |||||||||||||||||||||
| is cheaper. If the demand is less than 5000 units, it is cheaper to make | |||||||||||||||||||||
| in-house. | |||||||||||||||||||||
| For a given demand, you can also use the total cost to compare the | |||||||||||||||||||||
| Total Cost = Annual Fixed cost + (Variable cost/unit) Demand. |
