SKILL DEVELOPMENT EXERCISES UNIT SEVEN
Complete the exercises on the forms provided and send them by mail, fax, or email for helpful review and comment to:
Analysis Center
The MGI Management Institute
244 Westchester Avenue, Suite 100
White Plains, NY 10604
Fax: (914) 428-0773
e-mail: MGIUSA@aol.com
Please remember to include your student number and course identifier on the
exercise forms, the return envelope, the FAX Cover Sheet, or the e-mail. It will
help us to more quickly and accurately route your exercises to the appropriate
instructor. You’ll find the student number and the course identifier on the front
page of this course manual.
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SKILL DEVELOPMENT EXERCISE 7-1
Describe the rule of thumb for value vs. usage in ABC analysis.
SKILL DEVELOPMENT EXERCISE 7-2
Use the table at the top of the next page to analyze the following data to produce
an ABC classification based on annual dollar usage.
Item Number
1
2
3
4
5
6
7
8
9
10
Total
Annual Dollar Usage
$13,189
156,127
344
8,493
42,749
5,589
19,562
241,873
1,962
10,112
$500,000
Name _____________________________________ Student No. 56-_________
Address __________________________________________________________
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SKILL DEVELOPMENT EXERCISE 7-2 Cont.
Item
Number
Annual
$ Usage
Cumulative
$ Usage
Cumulative
% $ Usage
Cumulative
% of Items
Class
SKILL DEVELOPMENT EXERCISE 7-3
A company ships a product to a market 500 miles away at a cost of $4 per mile.
The company normally ships a truckload of 1,000 units at a time.
A. What is the line-haul cost per unit?
B. If the company shipped the units unassembled, they could ship 1,800 units at a
time. What is the line-haul cost now?
Name _____________________________________ Student No. 56-_________
Address __________________________________________________________
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SKILL DEVELOPMENT EXERCISE 7-4
Describe the two basic types of stock location systems.
SKILL DEVELOPMENT EXERCISE 7-5
Describe the three types of order picking and assembly systems.
Name _____________________________________ Student No. 56-_________
Address __________________________________________________________
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SKILL DEVELOPMENT EXERCISE 7-6
Given the following planned order releases from distribution centers A and B,
calculate the planned order release from Central Supply. The order quantity for
Central Supply is 500 units.
Week
DC “A” planned order release
1
2
3
100
100
100
200
100
2
3
DC “B” planned order release
Central supply—Lead time: 2 weeks
Order quantity: 500 units
Week
1
Forecast
Scheduled receipts
Projected available
500
Planned order release
SKILL DEVELOPMENT EXERCISE 7-7
List the advantages and disadvantages of rail transportation.
Name _____________________________________ Student No. 56-_________
Address __________________________________________________________
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