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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?
Read “Space Age Furniture Company” in Chapter 9 of your text. Respond to the following and include any Materials Requirement Planning (MRP) calculations: Develop an MRP for Space
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What is Prime Cost? The sum of Direct Labour Cost, Direct Expenses and Direct Material Cost is Prime Cost.
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1 To ensure that its supply chain can handle a surge in demand, MitiTech should: a. hire additional manufacturing employees b. modify its design to speed up production time
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