Quicksourcing

IntroEx Q5

a. Explain why a company benefits from the flexibility of making things when it wants to?

Companies don’t need to wait for the first product to sell out before starting to make the second. Instead, they can change designs as often as they want. Furthermore, because of the high rate of deliver fee, only popular or common products with large demand can be produced in China, or margin will cut. With quicksourcing, companies are able to order the product in a smaller amount.

b. Explain how the speed of sourcing is related to the inventory in the supply chain.

Companies can order small batches of goods that only cover weekly demand, which reduce the inventory significantly. When the inventory is lower than demand, they have the ability of quick replenishment.

Q 2.5

a. How many skiers are arriving, on average, in LaVilla every day?

In this case, the average inventory is 1200 skiers; average flow time is 10 days.

According to Little’s law, average flow rate= average inventory/average flow time= 1200/10=120 (skiers/day).

The number of new skiers arriving in La Villa every day is 120 on average.

b. What will be the percentage change in revenues of local restaurants compared to last year?

In order to make sure that hotels are fully booked when skiers only stay for five days, we need to recalculate the flow rate.

Current flow rate=1200/5=240 (skiers/day)

Previous revenue: 120*50*1+120*30*9=38400

Current revenue: 240*50*1+240*30*4=40800

(40800-38400)/38400=0.0625=6.25%

The revenue of local restaurants will increase 6.25% this year.

Q 3.5

a. Where in the process is the bottleneck?

Demand per hour for validation: 3 for grilled stuff; 11 for veggie; 4 for cream cheese

| Activitytime(min.) | Number of workers | Available capacity(bagels/hour) | Requested capacity(bagels/hour) | Implied utilization |

| | | | Grilled veggie | Veggie | Cream cheese | Total | |

Cut | 3 | 1 | 1/3=20 | 30/10=3 | 110/10=11 | 40/10=4 | 18 |...