MGMT 3306 Assignment 3 Problems 2015

 Instructions: 

1. Please answer the assignment questions in this docx file and save once you’re satisfied. Assignment 3 covers the lectures slides on Supply Chain Management. 

2. There are three assignment problems. Please follow the instructions given at the end of each question if any. 3. To resubmit your assignment, simply click to open “Assignment 3” again and click the grey button “Start New Submission” on the upper right corner of the “Review Submission History” webpage you’re directed to. You can make as many submissions as you like before the due time. Only the last submission will be graded. 

Assignment Problems (26 points in total): 

1. Please cite an example of forward vertical integration and an example of backward vertical integration. Avoid the cases cited in the textbook and lecture slides. (6 points) 

2. Company X can purchase a certain component from either Supplier A or Supplier B. Supplier A offers an incremental quantity discount and charges $10 per unit for the first 1,000 units in an order, $9 per unit for the next 1,000 units in the order, and $8 per unit for any unit beyond. Supplier B offers an all-unit discount and charges $9 per unit for orders of no more than 2,000 units and $8.5 per unit for any bigger orders. 

(a) Suppose Company X decides to buy 2,500 units from Supplier A. What is the average unit cost of the order? Please provide at least one step of calculation and the correct answer for full credit. (4 points) 

(b) If Company X wants to place an order of 5,000 units, which supplier offers a lower total cost. Please provide at least one step of calculation and the correct answer for full credit. (4 points) 

3. Suppose the revenue for a firm is $2,000,000. Its cost of goods sold is $85,000, and its average inventory value for the year is $50,000. 

a) What is the firm’s inventory turnover? Please include the formula, at least one step of calculation, and the correct answer for full credit. (6 points) 

b) What is the weeks-of-supply of the firm? Please include the formula, at least one step of calculation, and the correct answer for full credit. (6 points)