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Why do inventories cost so much to maintain? Provide some examples of how cost is associated with carrying an inventory Answer

Why do inventories cost so much to maintain? Provide some examples of how cost is associated with carrying an inventory. Is there anything we can do to lower this cost, and if so, what? In addition to the question above, explain how excess inventories can erode profitability.

 

Inventory costs can be categorized as follows:

Ordering Cost – Cost of procurement and inbound logistics costs form a part of Ordering Cost. Ordering excess quantity will result in carrying cost of inventory. Whereas ordering less will result in increase of replenishment cost and ordering costs.

Carrying Cost – Inventory carrying involves Inventory storage and management either using in house facilities or external warehouses owned and managed by third party vendors. Inventory management and process involves extensive use of Building, Material Handling Equipments, IT Software applications and Hardware Equipments coupled managed by Operations and Management Staff resources.

Inventory Storage Cost – Inventory storage costs typically include Cost of Building Rental and facility maintenance and related costs. Cost of Material Handling Equipments, IT Hardware and applications, including cost of purchase, depreciation or rental or lease as the case may be.

Cost of Capital/Interest Cost – This cost Includes the costs of investments, interest on working capital, taxes on inventory paid, insurance costs and other costs associate with legal liabilities.

A large inventory cost can result into higher tied up working capital which will mean that the funds that could have been used for some other business related profitable venture has been locked into inventory. A large inventory level result into higher interest cost, insurance cost and taxes for the business.

References:

http://www.managementstudyguide.com/inventory-costs.htm

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Drawing a Card If one card is drawn from a deck, find the probability of getting these results Answer

  1. Drawing a Card If one card is drawn from a deck, find the probability of getting these results.

Probability = Number of desired card / total number of cards

  1. An ace: 4/52 = 1/13
  2. A diamond: 13/52 = 1/4
  3. An ace of diamonds: 1/52
  4. A 4 or a 6: 8/52 = 2/13
  5. A 4 or a club: (13+3)/52 = 16/52 = 4/13
  6. A 6 or a spade: (13+3)/52 = 16/52 = 4/13
  7. A heart or a club: 26/52 = 1/2
  8. A red queen: 2/52 = 1/26
  9. A red card or a 7: (26+2)/52 = 28/52 = 7/13
  10. A black card and a 10: 2/52 = 1/26

 

  1. Cards If 2 cards are selected from a standard deck of 52 cards without replacement, find these probabilities.

P(two cards) = P(first card) x P(second card)

  1. Both are spades: (13/52)*(12/51) = 1/17
  2. Both are the same suit: 4*(1/17) = 4/17
  3. Both are kings: (4/52)*(3/51) = 1/221

 

  1. Selecting Cards Find the probability of getting 2 face cards (king, queen, or jack) when 2 cards are drawn from a deck without replacement.

Total number of face cards in the deck = 3*4 = 12

Probability = (12/52)*(11/51) = 11/121

 

 

  1. Senate Partisanship The composition of the Senate of the 107th Congress is 49 Republicans 1 Independent 50 Democrats A new committee is being formed to study ways to benefit the arts in education. If 3 Senators are selected at random to head the committee, what is the probability that they will all be Republicans?

P( 3 Senators) = P(1st senator) x P(2nd senator) x P(3rd senator)

P(3 republicans) = (49/100)*(48/99)*(47/98) = 0.11394

What is the probability that they will all be Democrats?

P(3 democrats) = (50/100)*(49/99)*(48/98) = 0.121212

What is the probability that there will be 1 from each party, including the Independent? Source: New York Times Almanac.

P(1 from each party) = 6*(49/100)*(1/99)*(50/98) = 0.01515

 

  1. Winning Tickets If 50 tickets are sold and 2 prizes are to be awarded, find the probability that one person will win 2 prizes if that person buys 2 tickets.

P(win both prizes) = 2*(1/50)*(1/49) = 0.000816

 

  1. Exercises 1 through 8 include questions that contain a flaw. Identify the flaw and rewrite the question, following the guidelines presented in this section.
  2. Will you vote for John Doe for class president or will you vote for Bill Jones, the football star?

Irrelevant choices provided, as football star can’t be my class president.

Correction: Will you vote for John Doe for class president or Mike Taylor?

 

  1. Would you buy an ABC car even if you knew the manufacturer used imported parts?

 

  1. Should banks charge their checking account customers a fee to balance their checkbooks when customers are not able to do so?
  2. Do you think that students who didn’t attend Friday’s class should not be allowed to take the retest?

There wouldn’t be a retest if students absent of Friday aren’t allowed.

Correction: Do you think that students who didn’t attend Friday’s class should be allowed to take a retest?

  1. How long have you studied for this examination?

Examination is still to be conducted.

Correction: How long have you been studying for this examination?

  1. Which artificial sweetener do you prefer?

No choices are provided to select one as a preference.

Correction: Which artificial sweetener do you like?

  1. If a plane were to crash on the border of New York and New Jersey, where should the survivors be buried?

Dead should be buried, not the survivors.

Correction: If a plane were to crash on the border of New York and New Jersey, where should the dead be buried?

  1. Are you in favor of imposing a tax on tobacco to pay for health care related to diseases caused by smoking?
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Why is it important to follow a process model? Does it have any benefits Answer

Why is it important to follow a process model? Does it have any benefits?

Process Models are well defined processes and procedures that have been used repeatedly for the development of systems. Following one of these processes will help with the definition of what needs to be done, and how it should be done. Selecting the appropriate process model is also important since it can affect the duration of the development process and the overall cost. Process models like waterfall, Incremental-build, Evolutionary, Agile, and Spiral models, can help a software development team with the process of continuous integration, verification and validation, early defect detection, and the early warning processes of potential problems and issues that every project encounters

Software is just like building anything else in the world. To do it effectively and efficiently you need a process. Just like manufacturers have work instructions and procedures on how to build a product, software engineers also need a process to properly build the application. The main objectives of a process is to increase productivity, quality, and improving the workflow within and among tasks to make software development more efficient and more effective. Improved work processes raise the productivity and morale of software developers, which then gets passed on to satisfaction of users and customers.

Benefits:

Alignment

Competitive Advantage

Control

Consistency

Better communication

In short, having projects run within pre-established methods that work increase the chances of project success.

Processing models are a set of standards that software engineers use in designing and coding their software. UML or Unified Modeling Language, can be considered a process model because it is the industry standard for modeling software systems.

How do process models help project align? Align with what? Strategic goals? Thoughts?

 

Process models help to align the project with business/project requirements. Projects will support strategic goals. Whether it’s a software project or remodeling a room you need a plan to do it. Process Models present steps you should take. Our organization is in the early steps of adopting a Scrum framework which, I believe, is one of the best for software development along with RUP. Granted I’m only basing that off of what I have learned and from what those that have done it told me. I personally have never worked on a software development project but I am ScrumMaster certified and have been through other Scrum training. From that training we used software development projects to practice and it just seemed to work well. I have also talked with Sr PM’s and they have stated the same thing.

What are some drawbacks or disadvantages of using a process model?

Processes and procedures serve as a guide for any implementation or project. Not having a defined process could lead to redundancy and an increase in overall project cost. One of the major disadvantages with a process model is that you cannot deviate from the defined process. You have to follow the defined process all the way out. Reducing redundancy saves time and money. Also, you are right about not being able to stop the process once it is started. When we first put our process together it was cumbersome and time consuming. No one liked it and it cause a lot of frustration.

What is another disadvantage of having a process model?

Process model obligates you to follow establish rules and criteria. Kinda like forcing you to follow the rules. in regard to the waterfall model specifically, here are a few disadvantages:

The biggest disadvantage is one of its greatest advantages. You cannot go back a step; if the design phase has gone wrong, things can get very complicated in the implementation phase.

Often, the client is not very clear of what he exactly wants from the software. Any changes that he mentions in between, may cause a lot of confusion.

Small changes or errors that arise in the completed software may cause a lot of problems.

Until the final stage of the development cycle is complete, a working model of the software does not lie in the hands of the client. Thus, he is hardly in a position to inform the developers, if what has been designed is exactly what he had asked for.

http://www.buzzle.com/articles/waterfall-model-advantages-and-disadvantages.html

What are some drawbacks or disadvantages of using a process model?

Process models are specialized process, procedures, design and arrangements, and systemic procedures used to develop software products and services. However, the impact of global supply chains and outsourcing/off-shoring of software developments activities across the globe, much compartmentalization and different areas of quality assurance, engineering and human capital teams, technology and equipment, and entire systems/processes/quality assurance. and putting together has meant PROCESS MODELS ARE NOT ALWAYS NEEDED. In fact, the large complex software technology, systems, components, and products and services demanded these days may require hundreds if not thousands of software processes and sub processes as they through global supply chain before final development is released. The reliance on one or few models do not simply work and vast range of software/engineering/programming/architectural personalities, visions, leadership, style and approach, trust and risk management has meant process models are not always enforceable during the entire software development process. Both the public and private section have many hundred billions allocated for new software development products and services and now INFORMATION SECURITY THREATS AND RISKS has pushed new trends towards more confidential in house processes and models harder to crack than the mainstream practices. Its about protecting the secrets, competitiveness, control, and insider knowledge of software developments and to prevent leaks and breaches of very critical knowledge that could damage projects and sponsors for a very long time frame. Thus, reliance on process models are decreasing and now with declining software infrastructure as more large scale and critical operations go overseas, there is little software developers can use to ensure the models and processes are done correctly and effective for the software development. Its not an easy process and software developments need a broad and diverse range of high end, high tech, high infrastructure and human capital, and newest and most innovative processes for each stage and process of development is needed and not a very narrow and bland approach. No matter what process model used, it falls short and opportunities for small to medium size software developers and servicers is declining as they are being bought by larger firms or go under because they cant compete or do not have the resources to develop software that meets and exceeds what the market demands. The technology changes too rapidly, costs cant be kept under control, and better wages and opportunities at larger firms means attracting and retaining quality human capital is difficult.

 

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MPS planners use what is referred to as time fences? What are they, and why are they used Answer

MPS planners use what is referred to as time fences? What are they, and why are they used? (Points : 20)

Ans: The inputs to MRP frequently change. This occurs in one of two ways: by recomputing the requirement and schedule periodically, often weekly, or via a “net change” calculation. Net change in an MRP system means the MRP system creates new requirements in response to trans-actions. However, many firms find they do not want to respond to minor scheduling or quantity changes even if they are aware of them. These frequent changes generate what is called system nervousness and can create havoc in purchasing and production departments if implemented. Time fences is particularly helpful when trying to reduce MRP system nervousness. Time fences allow a segment of the master schedule to be designated as “not to be rescheduled.” This segment of the master schedule is therefore not changed during the periodic regeneration of schedules.

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What were some of the principal reasons why the FCC approved the mergers of SBC Communications, Inc. with AT&T Corp. and Verizon Communications Inc. with MCI, Inc. Answer

What were some of the principal reasons why the FCC approved the mergers of SBC Communications, Inc. with AT&T Corp. and Verizon Communications Inc. with MCI, Inc.? 

According to me i think FCC should have stopped the merger because it doesn’t serve public interest as they claim to, this is because i see a situation where it might become a monopoly by using gains or profit from outside to undermine productive competition. Lets take for example costs of making international calls going to Japan from US might drop drastically for sprint customers but might not be the same to other companies like AT&T, T-Mobile.