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Manufacturing Planning and Control for

Supply Chain Management 6th Edition


Jacobs Solutions Manual
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Chapter 08 Solution Manual

CHAPTER 8
Solution Manual
Discussion Questions

1. This question is designed to get the students to think about priorities. The obvious priority is to
assign seniors first to the required class, so they will graduate, but fill the class with juniors so
that the capacity is utilized on the average. This is roughly equivalent to an earliest due date
rule. Clearly if the capacity is 40 per year, no prioritizing is necessary and all students will
graduate on time. If, on the other hand, there is only capacity for 10 students per year the
number of majors graduating a year cannot exceed 10 and the prioritizing rule will not create
capacity.

2. In addition to the status information discussed in the chapter, the students ought to be able to
suggest things like late completions, over-optimistic estimates of capacity, machine
breakdowns, changes in the labor situation, etc.

3. The queue time aspect of the lead time is the "rubbery" part of lead time. Since the queue time
can vary considerably and it is a major part of the lead time, actual lead times to complete an
item can vary from a minimum of their physical processing time to substantially greater than
that, as items sit in queue on the shop floor.

4. The shop floor is concerned with when a part should be completed, not when it arrived. The
examples given in the question are concerned with people so equitability is important. The
FCFS rule is viewed as equitable. That is, it serves people as they arrive and is not concerned
with when they should be finished. On the shop floor we are concerned with getting the parts
completed when they are needed, not processing them in some "equitable" fashion.

5 . Bottleneck work centers are finite forward loaded using computer scheduling logic.
However, non-bottleneck work centers are not forward finite loaded by computer scheduling
logic. Instead, due dates are set for these operations by considering the computer schedule for
the bottleneck work centers, and fixed lead time off-sets for the non-bottleneck operations.
This difference in the scheduling approach for bottleneck and non-bottleneck work centers is
desirable in order to focus major attention on the bottleneck work centers that constrain plant
work flow.

6. Buffers are placed in front of bottleneck work centers to allow for unforeseen variations in
production at earlier non-bottleneck work centers. This is done to protect the bottleneck work
centers from having idle capacity because of the late arrival of work. The idea is not to
disrupt the flow of material from a bottleneck work center. The size of these buffers is set in
proportion to the level of delay expected in the arrival of orders from earlier work centers.

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Chapter 08 Solution Manual

7. The notion of overriding the formal system to gain efficiencies on the factory floor must be
very carefully thought through. Clearly, one of the primary considerations in this
determination is the objectives of the production activity control system and the company. If
the shop floor economies are not great in relation to the benefits of sticking to the schedule,
then the schedule ought to remain king. On the other hand, if equipment utilization is
important, then discretion could be given to the foreman. A second level of concern is who
has the best information to make the trade-off decision, presuming that all people have valid
information.

8. The wands used by clerks in department and grocery stores, are used to collect sales and
process inventory information. The tags usually contain detail data on the item for inventory
control purposes and may have current price information for the cash register. The primary
benefits are improved accuracy in entering data at the point of sale (as compared to a clerk
manually putting data into the cash register) and improved inventory movement data.

9. The idea behind this question is to get students to think through some of the differences in the
activities and time-frames of the two groups of people. Also, the buyers interact with the
salespeople and, perhaps, the engineers at the vendors' locations while the schedulers are
more often interacting with the order entry people. Having the groups separated in the
organization helps maintain these distinctions in activities and focus. It is useful to help the
students see the differences and understand the difficulty of trying to "simultaneously finish a
term paper due tomorrow and decide on the elective courses to take in their senior year."

Chapter 8 - Problem Summaries

Problem Difficulty Problem Type

1 Moderate Machine center scheduling using Gantt charts. Need to consider job
priorities and arrival dates.

2 Easy Use priority scheduling rules to determine the processing sequence


and create a Gantt chart for the sequence using shortest operation next
rule.

3 Hard Priority scheduling with jobs produced at two work centers. Includes
order completion performance and move time.

4 Moderate Splitting jobs to meet due dates, this uses the same approach as
problem # 3 but allows one job to be split in two parts.

5 Easy Updates critical ratio as a job is partially completed.

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Chapter 08 Solution Manual

Chapter 8 - Problem Summaries

Problem Difficulty Problem Type

6 Moderate Priority scheduling problem with multiple jobs and multiple rules.
Students must determine the different sequences under each rule.

7 Easy Identifying the bottleneck department in a plant.

8 Hard Similar to problem 6 (priority scheduling) but requires the students to


sort through more information and to give the formulas for each rule.

9 Moderate Minimizing setups by running the same types of jobs together.

10 Hard Uses MRP records and open orders tied to routing. You must
determine if the timing of orders in the shop will allow the schedules
to be delivered when they are required by the MRP system.

11 Moderate Using the repetitive lots concept with transfer batches to minimize
flow time.

12 Easy Looks at the impact of the buyer’s MRP system on the supplier’s
scheduling. Examines adjusting the schedule so the supplier can
deliver the necessary goods.

13 Hard Determining the minimum size of transfer batch to minimize flow


when the process batch is split into two transfer batches.

14 Moderate Looks at using critical ratio to schedule jobs and then updating the
ratio’s after time has passed.

15 Moderate Linking shop floor schedules to MRP records. It shows the impact of
changes in on-hand inventory on and shop floor priorities.

16 Hard Comparing repetitive lots to the FCFS dispatching rule to determine


the impact on flow time.

17 Hard Determining the OPT production schedule and the resultant profit.

18 Moderate Using Pareto analysis to select suppliers for relationship building.

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Chapter 08 Solution Manual

1. TOM’S SAILBOARD
a.
WC1 B IDLE G IDLE K H

WC2 G B K H IDLE

WC3 IDLE B G H IDLE K IDLE

Order
Arrival 11/10 11/11 11/12 11/13 11/14 11/15 11/16 11/17 11/18 11/19 11/20 11/21 11/22
B, G H K

Which ever job arrives at each work center first starts being processed first because of
the FCFS rule in each work center. The work centers do not wait for an order if there is
already an order available. Use alphabetical order to break ties (e.g. both G and H arrive at
work center 3 on 11/12 but G gets priority based on alphabetical order).

b. The determination of how long jobs wait at work center 2 is as follows: B and G are
processed immediately at work center 2, order K must wait 1 day (11/14) and order H
waits 2 days (11/16 and 11/17).

2. THE KNOX MACHINE COMPANY


a. 1. The shortest operation next rule: B-D-A-C
2. The first-come, first-served rule: D-A-B-C
3. The earliest due date rule: C-A-D-B
b.

P&W
B D A C
Grinder

7/10 7/11 7/12 7/13 7/14 7/15 7/16 7/17 7/18 7/19 7/20 7/21

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Chapter 08 Solution Manual

3. ABC JOBS
a. EARLIEST DUE DATE -- Jobs B and C are late.

Machine Center X Machine Center Y


Job Start Days* Done Move Start Days Done Due
A 0.0 4.5 4.5 2.0 6.5 2.5 9.0 10.0
B 4.5 12.0 16.5 2.0 18.5 3.0 21.5 17.0
C 16.5 7.5 24.0 2.0 26.0 3.5 29.5 25.0
*All times in days, i.e. 40/5 = 8 hours per day,
36/8 = 4.5 days for job A.

b. CRITICAL RATIO -- Jobs A and C are late.

Critical Machine Center X Machine Center Y


Ratio Job Start Days* Done Move Start Days Done Due
1.00 B 0.0 12.0 12.0 2.0 14.0 3.0 17.0 17.0
*1.11 A 12.0 4.5 16.5 2.0 18.5 2.5 21.0 10.0
1.92 C 16.5 7.5 24.0 2.0 26.0 3.5 29.5 25.0
*(10 - 0)/(4.5 + 2 + 2.5) = 1.11

c. OVERTIME:
EARLIEST DUE DATE -- All jobs can be completed.

Machine Center X Machine Center Y


Job Start Days* Done Move Start Days Done Due
A 0.0 3.0 3.0 2.0 5.0 2.5 7.5 10.0
B 3.0 8.0 11.0 2.0 13.0 3.0 16.0 17.0
C 11.0 5.0 16.0 2.0 18.0 3.5 21.5 25.0
*60/5 = 12 hours per day, 36/12 = 3.0 days for job A.
CRITICAL RATIO -- Job A is late.
Critical Machine Center X Machine Center Y
Ratio Job Start Days* Done Move Start Days Done Due
1.31 B 0.0 8.0 8.0 2.0 10.0 3.0 13.0 17.0
1.33 A 8.0 3.0 11.0 2.0 13.0 2.5 15.5 10.0
2.38 C 11.0 5.0 16.0 2.0 18.0 3.5 21.5 25.0

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Chapter 08 Solution Manual

d. 1 DAY MOVE TIME


EARLIEST DUE DATE -- Jobs B and C are late.

Machine Center X Machine Center Y


Job Start Days* Done Move Start Days Done Due
A 0.0 4.5 4.5 1.0 5.5 2.5 8.0 10.0
B 4.5 12.0 16.5 1.0 17.5 3.0 20.5 17.0
C 16.5 7.5 24.0 1.0 25.0 3.5 28.5 25.0

CRITICAL RATIO -- Jobs A and C are late.

Critical Machine Center X Machine Center Y


Ratio Job Start Days* Done Move Start Days Done Due
1.25 A 12.0 4.5 16.5 1.0 17.5 2.5 20.0 10.0
1.06 B 0.0 12.0 12.0 1.0 13.0 3.0 16.0 17.0
2.08 C 16.5 7.5 24 1.0 25.0 3.5 28.5 25.0

4. ABC JOBS - SPLIT ORDER

Machine Center X Machine Center Y


Job Start Days Done Move Start Days Done Due
A 0.0 4.5 4.5 2.0 6.5 2.0 8.5 10.0
B1 4.5 6.0* 10.5 2.0 12.5 1.5* 14.0 17.0
C 10.5 7.5 18.0 2.0 20.0 3.5 23.5 25.0
B2 18.0 6.0* 24.0 2.0 26.0 1.5* 27.5 28.0
*Half of the time for the full order.
All the jobs will be completed on time by splitting job B into two parts.

5. YACHT PROJECT

Time Remaining 40− 11


a. Critical Ratio = = =1.04
Work Remaining 28

Time Remaining 40−11


b. Critical Ratio = = =.91
Work Remaining 32

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Chapter 08 Solution Manual

6. BIG DAN’S MACHINE SHOP


a.
Order
Rule 1 2 3 4 5
Critical Ratio 0.80 1.25 1.40 1.20 0.95
Earliest Due Date 12 15 14 18 19
Order Slack -3.0 3.0 4.0 3.0 -1.0
Shortest Operation Next 8 5 4 3 6

b.
Rule Order To Run Next
Critical Ratio 1
Earliest Due Date 1
Order Slack 1
Shortest Operation Next 4

7. MARUCHECK'S MAKESHIFT MANUFACTURING

If the three shaping machines are run in parallel, here is the total time in each department
to run a batch of 200 pieces:

Department Setup Run Time Total Time


Shaping 60 1  (200/3) 127 minutes
Pickling 0 4  60 240 minutes
Packing 0 (60  200)  (4  25) 120 minutes

Therefore, Pickling is the bottleneck operation.

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Chapter 08 Solution Manual

8. THE ACE MACHINE COMPANY


a.
duedate−now
1. Critical Ratio =
lead time remaining

2. Order slack = (due date - now) - (total processing time remaining)

3. Shortest operation next = smallest operation processing time

(due date−now)−( total processing time remaining )


4. Slack per operation=
number of operations remaining
b. 1. Priority Index Calculations:

Order
Rule 1 2 3 4 5
Critical Ratio .467 .733 -.100 -.333 .200
Order Slack -1.000 3.000 -10.000 -13.000 -5.000
Shortest Operation 2.000 3.000 5.000 4.000 1.000
Slack per Operation -.333 .750 -5.000 -4.333 -.417

Resulting Priority Sequences:

Rule Order To Run Next


Critical Ratio 4
Order Slack 4
Shortest Operation 5
Slack per Operation 3

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Chapter 08 Solution Manual

9. OPTIMA SHOP
a. The Gantt Chart shows a schedule to minimize setup costs. Note that customer order #1
could be shipped sooner if Part A of order #2 were not run on the same setup.

BIG MESS

Run A Run A Setup Run B Run B


Setup A
Customer #1 Cust. #2 B Customer #1 Customer #3

NO PROBLEM

Run Run
Setup C

C Run C Setup D
Cust. Cust. #3 D Cust.
#1 #2

5 10 15 20 25 30

The No Problem work center is scheduled to complete Part D, the second part of customer
order #2, at the same time as the other part on this order is completed. Part C for customer
order #1 is completed 4 days earlier than necessary (the alternative is to make customer
order #2 wait for part D or to re-setup C for customer order #3).
b. Yes -- no problem at all.
c. There is no change at all. The setups do not overlap between departments, so the set up
person can do them all as scheduled in a.
d. OPT is a finite loading approach. It would produce a result similar to the Gantt Chart in 1 a.
OPT would concentrate on Big Mess, since it is the bottleneck work center. It would
combine the setups as indicated to maximize the capacity utilization.

10. THE XYZ COMPANY


a. Shortest Operation Next Rule:

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Chapter 08 Solution Manual

Processing Time*
Item (Machine 2)
A 1
B 2
C 1.5
*In days
Item A should be scheduled first, item C scheduled second, and item B scheduled third.
The implications of this schedule are that orders for items A and C will be finished on
time, but the order for item B will be late.

b. Critical Ratio Rule:

Item Critical Ratio


A 5/5 = 1.0
B 10/14.5 = .690
C 5/3 = 1.667

Item B should be scheduled first, item A scheduled second, and item C scheduled third.
The implications of this schedule are that the orders for all items will be finished when
needed according to the MRP system.
c. The inventory planner should reschedule the order for 30 units of item B to be received at
the start of Week 7 instead of Week 3. The critical ratio priority would change to 30/14.5 =
2.07 and would be scheduled last.

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Chapter 08 Solution Manual

11. THE ACE TOOL COMPANY


a.

NO TRANSFER BATCHES
Hour 40.67

WORK CENTER 1
Hour 65.00

WORK CENTER 2

TRANSFER BATCHES
Hour 40.67

WORK CENTER 1

Hour 43.40

WC WC WC WC WC WC WC WC WC WC
2 2 2 2 2 2 2 2 2 2

1 2 3 4 5 6 7 8 9

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Chapter 08 Solution Manual

b. Under No Transfer Option:

Work center 1: 2.4 min./unit X 1,000 units + 40 min. setup time


= 2,440 min. or 40.67 hours.

Work center 2: 1.44 min./unit X 1,000 units + 20 min. setup time


= 24.33 hours.
(The last operation is completed at hour 65.0 at work center 2.)
Under Transfer Option:
Work center 1: 2.4 min./unit X 1,000 units + 40 min. setup time
=2,440 min. or 40.67 hours.

Work center 2: • First batch starts as early as 40 min. + 100 X 2.4


= 280 minutes or 4.67 hours.
• Each batch of 100 takes 4 hours to process at work center 1
and 20 min. + 1.44 min./unit X 100 = 164 min. or 2.73
hours on work center 2.
• The last batch can clear work center 2 as early as hour
43.40.
c. Benefits of Using Transfer Batches:

Shorter production lead time


Less work-in-process inventory
Improved customer service

Costs Using Transfer Batches:


There could be as many as 10 setups required at work center 2 if none of the
batches were run under the common setup. Such a schedule is shown below.

Work center 2

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Chapter 08 Solution Manual

Under Transfer Batches


Batch # Early Start Time Time
1 4.67 7.40
2 8.67 11 .40
3 12.67 15.40
4 16.67 19.40
5 20.67 23.40
6 24.67 27.40
7 28.67 31.40
8 32.67 35.40
9 36.67 39.40
10 40.67 43.40

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Chapter 08 Solution Manual

12. FLATBUSH PRODUCTS, INC.


a.

Circuit #101
Week 1 2 3 4 5 6 7 8 9 10 11 12
Gross Reqs. 50 50 50 50
Scheduled Rec.
Proj. Avail. Bal. 65 15 15 15 15 15 15 15 15 15 15 15 15
Plan. Order Rel. 50 50 50
Q = 50; LT = 3; SS = 2
b. Pete should level out the requirements for circuit #101 in order to meet the limited capacity
restrictions of the vendor. This can be accomplished by planning to release orders earlier in
the planning horizon as follows:

Circuit #101
Week 1 2 3 4 5 6 7 8 9 10 11 12
Gross Reqs. 50 50 50 50
Scheduled Rec.
Proj. Avail. Bal. 65 15 15 15 65 65 65 65 115 115 65 15 65
Plnd. Order Rel. 50* 50* 50*
Q = 50; LT = 3; SS = 2
* Firm planned order

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Chapter 08 Solution Manual

13. ED’S SHEET METAL


a. General Gantt chart for a transfer batch of Qt:

Operation 1 S1 Run Q t Run (800-Q t)

Transfer T T

Operation 2 S2 Run Q t Run (800-Q t)

A B C

In order for there to be no idle time at operation 2 and to have the minimum transfer lot, the
run time on operation 1 for the remainder of the order plus the transfer time must equal the
transfer time plus setup and run time for the transfer batch at operation 2 (see B above). In
mathematical terms:
20 + 90 + 8 Q t = 6  ( 800 − Q t ) + 20
90 + 8 Q t = 4800 − 6 Q t
14 Q t = 4710
Q t = 337
Total manufacturing lead time for transfer batch approach:

For A 60 + (6  337) = 2082


For B 20 + 90 + (8  337) = 2806
For C 8  463 = 3704
Total 8592

b. No transfer batches:

Operation 1: 60 + (6  800) = 4860


Operation 2: 20 + 90 + (8  800) = 6510
Total 11370

Savings: 11,370 - 8,592 = 2,778 minutes.

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Chapter 08 Solution Manual

14. FRAMKRANTZ FACTORY

The spreadsheet program calculates the priorities as a function of the times in the table
plus move and queue time.

a. Job D is the most critical job and is behind time as is job C.


Time Work Remaining by Activity
Job Remaining Machine Move Queue Total Priority
D 15 11 4 8 23 .65
C 21 13 3 6 22 .95
E 27 16 4 8 28 .96
A 19 5 2 4 11 1.73
B 40 13 3 6 22 1.82

b. Since all jobs are waiting, the time saved at machine 1 made no difference in relative
priorities. The absolute priorities did change, though. Four of the jobs are now behind
schedule.

Shop Day = 96
Time Work Remaining by Activity
Job Remaining Machine Move Queue Total Priority
D 2 5 3 6 14 0.14
C 8 10 2 4 16 0.50
E 14 12 3 6 21 0.67
A 6 4 1 2 7 0.86
B 27 10 2 4 16 1.69

c. As shown below, the priority for job A drops to zero. It is now most critical.
Time Work Remaining by Activity
Job Remaining Machine Move Queue Total Priority
A 0 4 1 2 7 .00

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Chapter 08 Solution Manual

15. PART NUMBER 483


The MRP records for each of the situations are:
a.
Part No. 483
Week 1 2 3 4 5 6
Gross Requirements 14 4 10 20 3 10
Scheduled Receipts 40*
Projected Available Balance 20 6 42 32 12 9 39
Planned Order Release 40
Q = 40, LT = 2, SS = 5
*Shop Order Number 32

There is nothing for the planner to do. The part is right on schedule.
b.
Part No. 483
Week 1 2 3 4 5 6
Gross Requirements 14 4 10 20 3 10
Scheduled Receipts 40*
Projected Available Balance 23 9 5 35 15 12 42
Planned Order Release 40
Q = 40, LT = 2, SS = 5
*Shop Order Number 32

There is nothing the planner should do here either, even though the part is ahead of
schedule. The priority on the shop floor should reflect the fact that the part is ahead of
schedule and move it through only if there is nothing of higher priority.
c.
Part No. 483
Week 1 2 3 4 5 6
Gross Requirements 14 4 10 20 3 10
Scheduled Receipts 40*
Projected Available Balance 17 43 39 29 9 6 36
Planned Order Release 40
Q = 40, LT = 2, SS = 5
*Shop Order Number 32

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Chapter 08 Solution Manual

Now there is a problem, but only a minor one! There will be a need to use some safety
stock to cover the immediate order, and the planner should indicate that the part won't be
finished until next week in case some subassembly is expecting to use it.

Situation:
Part No. 483 a. b. c.
Due date 105 110 100
Current date 100 100 100
Time remaining 5 10 0

Work remaining:
Move time 2 2 2
Machine time 2 2 2
Queue time 1 1 1
Total 5 5 5
The critical ratio 1 2 0

16. BORING MACHINE CENTER


a.
Start Setup Run Completion
Job Time Time Time Time
A 8:24 AM 15 min. 10 min. 8:49 AM
B 8:49 AM 10 15 9:14 AM
C 9:14 AM 20 20 9:54 AM
A 9:54 AM 15 10 10:19 AM
B 10:19 AM 10 15 10:44 AM
B 10:44 AM 15 10:59 AM
C 10:59 AM 20 20 11:39 AM
C 11:39 AM 20 11:59 AM
A 11:59 AM 15 10 12:24 PM
A 12:24 PM 10 12:34 PM
B 12:34 PM 10 15 12:59 PM
C 12:59 PM 20 20 1:39 PM
A 1:39 PM 15 10 2:04 PM
B 2:04 PM 10 15 2:29 PM
B 2:29 PM 15 2:44 PM
First-come, first-served finish time is 2:44 P.M.
Total flow time is 6 hours, 20 minutes.

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Chapter 08 Solution Manual

b.
Arrival Start Setup Run Completion
Job Time Time Time Time Time
A 8:24 AM 8:24 AM 15 10 8:49 AM
A 8:34 AM 8:49 AM 10 8:59 AM
A 8:56 AM 8:59 AM 10 9:09 AM
A 9:03 AM 9:09 AM 10 9:19 AM
A 9:18 AM 9:19 AM 10 9:29 AM
B 8:28 AM 9:29 AM 10 15 9:54 AM
B 8:39 AM 9:54 AM 15 10:09 AM
B 8:40 AM 10:09 AM 15 10:24 AM
B 9:12 AM 10:24 AM 15 10:39 AM
B 9:21 AM 10:39 AM 15 10:54 AM
B 9:31 AM 10:54 AM 15 11:09 AM
C 8:31 AM 11:09 AM 20 20 11:49 AM
C 8:42 AM 11:49 AM 20 12:09 PM
C 8:44 AM 12:09 PM 20 12:29 PM
C 9:14 AM 12:29 PM 20 12:49 PM
Finish time is 12:49 P.M.
Total flow time is 4 hours, 25 minutes.

17. HOWIE’S HANDICRAFT


a.
Step 1: Determine the bottleneck
Weekly Station
Product Potential 1 2 3
Witches 60 600 600 2400
Goblins 50 500 750 2000
Ghosts 40 400 400 800
Ghouls 30 450 600 600
Total 1950 2350 5800
Station 3 is the bottleneck since it exceeds 2400 mins. when using full weekly potential for all
the products.
Step 2: Determine the most profitable product based on contribution per bottleneck minute.

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Chapter 08 Solution Manual

Contribution
Product Price Material Contribution per minute Priority
Witches $35 $15 $20 $0.500 4
Goblins $40 $15 $25 $0.625 3
Ghosts $45 $20 $25 $1.250 2
Ghouls $50 $20 $30 $1.500 1

Step 3: Determine the production schedule and contribution


Production Capacity Capacity
Product Schedule Contribution Used Remaining
Ghouls 30 $900 600 1800
Ghosts 40 $1000 800 1000
Goblins 25 $625 1000 0
$2525

b. Profit = $2525 - $2000 = $525

18. MARLBOROUGH MANUFACTURING COMPANY


a. The companies with the greatest New Zealand dollars were spent that also have multiple
orders which (e.g. Whist, Gentry) would be good candidates for building relationships.
Exceptions might be firms with low dollar value but critical items or those with single
orders (these might be capital equipment; e.g. Locket) which might be used in the future.
These aren’t good candidates for starting the program, however.

NZD Cumulative Cumulative


Company NZD Percent Percent (NZD) Percent of Cos.
Whist 2,171,886 27.02 27.02 5.00
Gentry 1,850,120 23.02 50.04 10.00
Kolst 1,367,484 17.01 67.06 15.00
Jacobs 965,283 12.01 79.07 20.00
Locket 563,087 7.01 86.07 25.00
Axel 321,760 4.00 90.08 30.00
Booker 186,242 2.32 92.39 35.00
Zydec 121,555 1.51 93.91 40.00
Farmic 80,440 1.00 94.91 45.00
Hooker 64,532 0.80 95.71 50.00
Hume 63,253 0.79 96.50 55.00
Kume 57,305 0.71 97.21 60.00

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Chapter 08 Solution Manual

Backer 55,122 0.69 97.89 65.00


First 48,262 0.60 98.50 70.00
Grist 40,220 0.50 99.00 75.00
Wolf 31,523 0.39 99.39 80.00
Young 17,053 0.21 99.60 85.00
Century 16,088 0.20 99.80 90.00
Kelvin 8,124 0.10 99.90 95.00
Neive 7,944 0.10 100.00 100.00
8,037,283

100
Cumulative Perccent of Purchases

80

60

40

20

0
0

10

20

30

40

50

60

70

80

90

100

Cumulative Pe rce nt of Supplie rs

b. Those firms with low dollar amounts would be candidates for deletion.
c. Marlborough might want to look at their order policies. Many of the companies in the
sample only get a small number of orders per year. Does this mean that Marlborough is
not managing their inventory well? If they can’t do that, the company, probably isn’t
prepared to enter into closer supply chain relationships.

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