Spring 2013 Midterm 2 V1 Key.docx - TOM Mid-Term#2 Spring 2013 OEM Technology\/Operations Management Mid-Term Exam#2 \u2013 Spring 2013 Semester Version One

Spring 2013 Midterm 2 V1 Key.docx - TOM Mid-Term#2 Spring...

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TOM Mid-Term #2 Spring, 2013 OEM: Technology/Operations Management Mid-Term Exam #2 – Spring, 2013 Semester Version One Friday, April 12, 2013 Section (circle): 01 02 03 04 05 06 Professor (circle): Licari Erzurumlu Instructions: 1. You have 120 minutes for this exam. 2. The exam has 12 pages including this cover page and a blank sheet at the end for work space, as required. Please check to assure that you have all pages. 3. Read all questions carefully before you begin answering. Please copy in your own handwriting and sign the following pledge below: “I pledge my honor that I have neither received nor provided unauthorized assistance during the completion of this work.” Pledge ANSWER KEY Signature Date 1
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TOM Mid-Term #2 Spring, 2013 A. Inventory Management –Adapted from Parrot SA of Paris France. (Fictionalized) (40 Points Total) Parrot SA based in Paris, France produces an actual flying drone which is controlled wirelessly by the operator’s cell phone; the target customers for the drone are hobbyists withtechnical interests and skills. The drone comes in two sizes;both sizes are powered by re-chargeable “high density” batteries. The two models of the drone utilize the same battery SKU (stock keeping unit), but the Model One Drone utilizes one battery per drone; the larger version (the Model Two) uses two batteries per drone. The rechargeable batteries have an estimated useful life of one year; accordingly Parrot anticipates a brisk business for replacement batteries, since the Drones sold very well in their first two years of availability (2012 and 2013). The Parrot Drone is manufactured in Paris and the battery production is outsourced to HDB Corporation based outside of Tokyo, Japan. HDB charges Parrot $10.00 per battery. The Inventory Management (IM) Team has determined that batteries intended for the new systems must be received from Japan one quarter prior to the Drone requirement, to allow time for Drone production, packaging and shipment to the retailer channel. Batteries intended for sale as replacements can be received from Japan in the same quarter they are sold. The IM team is using the following data for its planning:Lead-time (includes Japan to US shipping)2 Weeks Annual Inventory Holding Cost ($/battery/year) $2.00Order Administration Costs ($/order) $260.00Shipping costs ($/air shipment)$2,800.00Parrot’s marketing team forecasts that the demand share between the two Models of Drones will evolveas follows. The forecast for the total number of Drones to be sold is also forecasted for the product line. (Assume for our purposes that the forecasts are accurate.)The Parrot Drone in Flight – Model One Parrot’s marketing team has also forecasted the sale of replacement batteries based on the number of Drones which Forecas t Quarte r 1, 2014 Quarter 2, 2014 Quarter 3, 2014 Quarter 4, 2014 Quarter 1, 2015 2 HDB’s High Density Battery for the Parrot Drone For Grading Purposes Points Available Actual Points Earned Part A. 40 Part B. 24 Part C. 36 Total 100
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TOM Mid-Term #2 Spring, 2013 Forecasted Sales of Replacement Batteries 15,500 28,000 36,500 44,000 56,500
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