Chapter 2 Solutions - Matching Supply with demand

Table 2.3 Patient Number 1 2 3 4 5 6 7 8 9 10 11

Arrival Time 7:35 7:45 8:10 9:30 10:15 10:30 11:05 12:35 14:30 14:35 14:40

Table 2.4

Page 2-10 Page 2-13

0.933333333 15

Departure Time Flow Time 8:50 1:15 10:05 2:20 10:10 2:00 11:15 1:45 10:30 0:15 13:35 3:05 13:15 2:10 15:05 2:30 18:10 3:40 15:45 1:10 17:20 2:40 Average 2:04:33 56

Kmart Corp. Inventory Income Total operating revenue Cost of goods sold Net income Wal-Mart Stores Inc. Inventory Income Net sales Total operating revenue Cost of goods sold Net income Kmart 2002 Flow Rate Kmart 1998 Flow Rate Wal-Mart 2002 Flow Rate

1/28/1998 1/27/1999 1/26/2000 1/31/2001 1/29/2002 6367

6536

6350

5796

4825

33674 26319 518

35925 28161 364

37028 29732 -268

36151 29853 -2446

30762 26258 -3219

16497

17076

19793

21644

22749

117958 119299 93438 3526

137634 139208 108725 4430

165013 166809 129664 5377

191329 193295 150255 6295

217799 219812 171562 6671

0.1837535 67.070036 5.4420725 3.6750705 0.2419165 88.299517 0.1325993 48.398742 7.5415183

Inventory Cost of Goods Sold Flow Time (in years) Inventory Turnover Per-Unit Inventory Cost Percentage

400 26442 0.015127 66.105 0.605098

Throughput (in passengers per hour) Inventory Flow Time (in hours) Flow Time (in minutes)

255 35 0.137255 8.235294

Sales Inventory

60000000 20000000

Part A Selling Price COGS per Unit Units Sold Total COGS Flow Time (in years) Inventory Turns

2000 1000 30000 30000000 0.666667 1.5

Part B Per-Unit Inventory Cost Percentage Per-Unit Inventory Cost (in $)

16.66667 166.6667

Revenue Inventory COGS

100000000 5000000 50000000

Part A Flow Time (in years) Inventory Turnover

0.1 10

Part B Per-Unit Inventory Cost Percentage Per-Unit Inventory Cost (in $)

4 1.2

Inventory Flow Time (in days) Part A Throughput (in skiers per day)

1200 10

120

Part B New Throughput 240 On an average day, there are 1200 skiers, and 240 of those are spending their first night in the hotel. In 2002/03 there were still an average of 1200 skiers each day, but only 120 of those were spending their first night in the ho Average Daily Revenue (2002/03) 38400 Average Daily Revenue (2003/04) 40800 Percentage Change from 2002/03 to 2003/04

5.88%

ng their first night in the hotel.

Speed (in MPH) Inventory Flow time for 1/4-mile stretch of highway (in hrs) Throughput (in cars per hour on highway) Throughput (in cars per minute on highway)

60 24 0.004167 5760 96

Flow Time (in minutes) Flow Time (in hours) Throughput (in units per hour)

12 0.2 4000

Required Inventory (oven size)

800

Associates Managers Partners

200 60 20

Associate flow time (in years) Manager flow time (in years) Partner flow time (in years)

4 10 20

Part A Associate throughput

50

Part B Probability that new associate will become partner Odds that new associate will become partner

0.1 10 to 1

Inventories ($MM) Sales (net $MM) COGS ($MM)

Costco Wal-Mart 3643 29447 48106 286103 41651 215493

Part A Flow Time (in days)

31.92468 49.87705

Part B Per-Unit Inventory Cost Percentage Per-Unit Inventory Cost (in $)

2.623947 4.099484 0.131197 0.204974

Difference between inventory cost for $5 COGS item for the two companies:

0.073777

Inventory Revenue Cost of Goods Sold Gross Profit

McDonald's Wendy's 129.4 54.4 17140.5 3148.9 11943.7 1634.6 5196.8 1514.4

Part A Flow Time (in years) Inventory Turnover

0.01083416 0.03328 92.3006182 30.04779

Part B Per-Unit Inventory Cost Percentage Per-Unit Inventory Cost (in $)

0.32502491 0.998409 0.00975075 0.029952

Difference between Wendy's and McDonald's inventory cost per value meal (in $):

0.020202