Supply Chain Management Home Work 3 BUS 370

Problem 1: Little’s Law (7 points)

An auto repair company works five days per week and last week had the following new orders and end of day inventory levels.  This company should be assumed to be operating at steady state so Little’s Law can be applied.

a)      What is the average arrival of orders per day? (2 points)

a)      What is the average end of day inventory level? (2 points)

a)      Using little’s Law, what is the average amount of time a car spent at the auto repair company Monday through Friday last week? (3 points)

Problem 2: Supplier Selection (8 points)

Your sourcing department has evaluated three suppliers and scored them on a 1-5 scale (1=poor to 5=very good) across three dimensions: on time delivery, excess capacity, and cost.  The importance of each dimension is weighted as shown below.

a)      Calculate the weighted average score for each supplier. (6 points)

a)      Which supplier should be selected based on these criteria? (2 points)

Problem 3: Transportation Costing (10 points)

You work for Levi’s and need to send a shipment of jeans to Target with the following characteristics.

Size: 2 pallets (1/10 trailer)

Weight: 5,000 pounds

Distance from Levi’s to Target: 750 miles

Levi’s to Target Truckload rate: $1.40/mile

Levi’s to Target LTL rate: $15/hundred-weight

Levi’s to Target Airfreight rate: $5/pound

a)      What is the cost to send this shipment direct via LTL? (2 points)

a)      What is the cost to send this shipment direct via Airfreight? (2 points)

For part c), assume the shipment will be sent through a local crossdock called Genco.  Genco consolidates multiple shipments onto full truckloads that move from its facility to Target’s dock.  You are given the following additional information.

Distance from Levi’s to Genco: 30 miles

Distance from Genco to Target: 740 miles

Genco pickup and handling charge: $50 per pallet

Genco to Target Truckload rate: $1.20/mile

a)      What is the cost to move this shipment through the Genco crossdock and to Target? (Hint: don’t forget to prorate the transportation cost from Genco to Target). (6 points)