Week 5 Homework

11 Chapter Questions 1. What recent changes have caused supply chain management to gain importance? Changes include: a. Competitive pressures from foreign firms. b. Elevation of product quality to a very high level of importance. c. International marketing and international purchasing. d. Trends towards choosing sole-source suppliers and long term relationships. e. Product varieties and ranges are rapidly changing, and speed of delivery to market is essential. f. Product life cycles have shortened necessitating knowledge and control of inventories in the various pipelines. g. Adoption of JIT production has changed supplier relationships and has also increased the focus on reducing inventories. h. Trends in the legal system hold manufacturers liable for product failures, even though causes of failure may lie outside of the production system itself. i. Use of EDI in purchasing. j. The growth of supplier development. 2. With so much productive capacity and room for expansion in the United States, why would a company based in the United States choose to purchase items from foreign firm? Discuss the pros and cons. The use of foreign firms can provide a U.S. firm more alternatives in selecting a supplier. The pros are more choices, potentially reduced costs in the areas of materials, transportation, production, and distribution, and potentially moving closer to a foreign market. The cons are the distance is generally increased, communications problems are increased due to distance, culture, and technology. There may be problems with customs, government regulations, political stability, etc. BUSN 6110 Operations Project Management Summer, 2008 Week 5 Burnett Isenberg Page 393 3. The McBonalds fast-food resturant on campus sells an average of 4,000 quarter-pound hamburgers each week. Hamburger patties are resupplied twice a week, and on average the store has 350 pounds of hamurger in stock. Assume that the hamburger cost $1.00 a pund. What is the inventory turnover for the...