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800000
75000080000
780000.1
8
6
90.3
9
5
70.4
9
8
80.2
4
7
5b) Find inventory turnover for current and last year.
Find: a) Break Even Annual Demand
In-house: Annual Fixed Cost F
IN
= $80000 b) If annual demand is 10000 units which option would you recomment? Explain.
4. ABC company wants to determine whether a component should be manufactured
in-house or outsourced. The following table gives related data.
800000
75000080000
780000.1
8
6
90.3
9
5
70.4
9
8
80.2
4
7
5b) Find inventory turnover for current and last year.
Find: a) Break Even Annual Demand
In-house: Annual Fixed Cost F
IN
= $80000 b) If annual demand is 10000 units which option would you recomment? Explain.
4. ABC company wants to determine whether a component should be manufactured
in-house or outsourced. The following table gives related data.
Variable cost/unit V
IN
= $10
Variable cost/unit V
OU
= $5
Annual Fixed Cost F
OU
= $120000
Inventory investment
Current Year
Last yeara) Find weeks of supply for current and last year.
c) Comment on performance this year compared to last year.
Country X
Country Y
Country Za) Computed weighted score for each criterion and total weighted score for each country.
b) Which country should be selected? Explain.MGSC 303 EXAM 1 SUM 2013At this demand level the total cost will be the same for both alternatives.
If actual forecasted demand is greater than 5000 units then outsourcing
is cheaper. If the demand is less than 5000 units it is cheaper to make
in-house.
For a given demand you can also use the total cost to compare the
alternatives.
Total Cost = Annual Fixed cost + (Variable cost/unit) Demand.
Out Source:
3. ABC Company is considering 3 foreign locations for outsourcing its call center.
The following table gives weights for criteria used score assigned for each criterion.
The score range from 0 to 10 where 10 indicates excellence and zero very poor.
Criterion
Weight
Flexibility
Trustworthy
Price
Delivery
1. ABC Co. had a Net Revenue of $75000 Cost of Sales $60000.
It had Inventory Investment of $12000 and Total Assets of $150000.
Find:
a) Percentage of assets committed to inventory:
b) Inventory turnover:
c) Weeks of Inventory:
2. ABC Co. while reviewing its performance found the following:
Cost of goods sold

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