Question

Your firm produces watches. Below is an overview of how materials move through your supply chain. For each party listed, you will see a loss or defect rate associated with that part of the supply chain. Assume that the list is in order of most upstream to most downstream. A. Supplier 1.2% defect rate 12 B. Manufacturer-0.95% defect rate C. Distributor- 1.05% defect rate D. Retail store - 0.3% defect rate How many watches should the retailer order to provide 6,000 watches to consumers? a. How many watches should the distributor order based on the retailer's order? How many watches should the manufacturer order based on the distributor's order? How many watches should the supplier order based on the manufacturer's order? b. С. d.

Answer 1

a.) retail = 6,019

b.) distributor= 6,083

c.) manufacturer= 6,142

d.) supplier = 6,217

Explanation:

a. How many watches should the retailer order to provide 6,000 watches to consumers?

`N_(retail) = (6,000)/(1-0.003) = 6,018.054`

Rounding up to the next whole unit:

Nretail = 6,019

b. How many watches should the distributor order based on the retailer's order?

`N_(distributor) = (N_(retail) )/(1-0.0105) = 6,082.87`

Rounding up to the next whole unit:

Ndistributor= 6,083

c. How many watches should the manufacturer order based on the distributor's order?

`N_(manufacturer) = (N_(distributor))/(1-0.0095) = 6,141.34`

Rounding up to the next whole unit:

Nmanufacturer= 6,142

d. How many watches should the supplier order based on the manufacturer's order?

`N_(supplier) = (N_(manufacturer))/(1-0.012) = 6,216.6`

Rounding up to the next whole unit:

Nsupplier = 6,217