Solution Manual for Introduction to Materials Management, 8th Edition by Stephen N. Chapman All Chapters Covered Latest Edition

, CONTENTS




Chapter .1: .Introduction .to .Materials .Management ......................................................................2
Chapter .2: .Production .Planning .System ......................................................................................9
Chapter .3: .Master .Scheduling ................................................................................................... 21
Chapter .4: .Material .Requirements .Planning ............................................................................. 31
Chapter .5: .Capacity .Management ..............................................................................................57
Chapter .6: .Production .Activity .Control .....................................................................................65
Chapter .7: .Purchasing .................................................................................................................83
Chapter .8: .Forecasting ................................................................................................................87
Chapter .9: .Inventory .Fundamentals .........................................................................................112
Chapter .10: .Order .Quantities ...................................................................................................123
Chapter .11: .Independent .Demand .Ordering .Systems..............................................................136
Chapter .12: .Physical .Inventory .and .Warehouse .Management................................................170
Chapter .13: .Physical .Distribution ............................................................................................181
Chapter .14: .Products .and .Processes.........................................................................................192
Chapter .15: .Lean .Production ....................................................................................................202
Chapter .16: .Total .Quality .Management ...................................................................................210




iii

, 2


INTRODUCTION .TO .MATERIALS .MANAGEMENT

.CHAPTER .1


ANSWERS .TO .PROBLEMS

1.1 Sales 100% 100%
Cost .of .manufacturing . . 60% 50%
Other .costs 30% 90% 30% 80%
Profit .(percent .of .Sales) 10% 20%
Therefore .a .10% .reduction .in .the .cost .of .manufacturing .would .produce .a .100%
.increase .in .profit.


1.2 Profit = Sales .– .(direct .costs .+ .overhead)
0.20 . = Sales .– .(0.60 .× .Sales .+ .0.30)
Sales = 0.5 = 1.25 = 125%
0.4
To .increase .profits .from .10% .to .20% .takes .a .25% .increase .in .sales .but .only .a .10%
.decrease .in .costs. .Good .materials .management .can .have .a .direct .impact .on .profit.
.Note .the .cost .of .overhead .has .been .left .unchanged .in .this .problem.


1.3 a. . . Weekly .cost .of .goods .sold .= .$12,000,000 = .$240,000
50
Value .of .8 .weeks‘ .WIP . = 8 .× .$240,000 . = . $1,920,000
b. . Value .of .6 .weeks‘ .WIP . = 6 .× .$240,000 . =
. $1,440,000 .Reduction .in .WIP . = .$480,000


1.4 a. . . Weekly .cost .of .goods .sold = $30,000,000 = $600,000
50
Value .of .10 .weeks' .WIP = 10 .× .$600,000 = $6,000,000
b. . . Value .of .5 .weeks' .WIP = 5 .× .$600,000 = $3,000,000
Reduction .in .WIP = $3,000,000
Annual .saving = 20% .× .$3,000,000 = $600,000


1.5 Using .$1 .million .as .the .units:
As .a .% .of .sales
Sales $10.0 100%
Direct .material $3.5 35%
Direct .labor 2.5 25%
Overhead 3.5 9.5 35% 95%
Profit $.5 5%

, 3


a. From .the .above .we .can .say: .(in .millions .or .M$)
Sales = direct .material .+ .direct .labor .+ .overhead .+ .profit .(now .1M$)
= .35(sales) .+ ..25(sales) .+ .3.5 .M$+ .1.0 .M$
.40 .(Sales) = .4.5 .M$
Sales = 11.25 .M$ . = 11.25 .× .$1,000,000 . = .$11,250,000
Therefore .there .must .be .a .$1.25 .million .increase .in .sales.

b. To .increase .profit .by .$500,000 .there .must .be .a .$500,000 .reduction .in .cost.
.Therefore .direct .material .must .be .reduced .by .$500,000. .It .therefore .takes .2 .½
.times .the .sales .dollars .to .obtain .the .profit .that .would .be .realized .in .material
.reductions.


c. As .for .b. .Direct .labor .would .have .to .be .reduced .by .$500,000.