Mexician Foods operates a plant in Texco, a Mexican state of Guerro, for manufacturing taco sauce
used in fastfood restaurants. The sauce, which is packaged in plastic containers, is made from a
special recipe that includes tomato concentrate, onions, and chilli peppers that Mexician
purchases from various suppliers. The plant operates 365 days a year and Mexician uses an annual
holding cost rate of 17%.
Mexician Foods purchases its tomato concentrate from Organic Farms. The company requires
2,540 gallons of concentrate per day to produce this sauce. Organic Farms offers customers the
following all units price discount schedule:
Number of Gallons Ordered Price per Gallon ($)
10,000 – 49,999 3.08
50,000 – 124,999 3.02
125,000 – 249,999 3.00
250,000 or more 2.96
The shelf life of the concentrate is 80 days and the ordering cost is $760. Orders must be placed in
1200gallon increments. The lead time for delivery is 10 days. Management wishes to determine the
optimal ordering policy for the concentrate.
In the cooking process, the amount of onion required weekly follows a normal distribution with
mean 16,210 pounds and standard deviation 4,100 pounds. Onions cost $0.15 per pound. If any are
left over at the end of the week, they are unusable and thrown away. If management at Mexician
find themselves running short of onions, they would need to make an emergency purchase from a
local supermarket. They would have to pay the retail cost of onion at $0.95 per pound. Management
wants to determine the optimal order policy for onions.
Mexician also needs an estimated 2,100 pounds of chilli peppers daily. The peppers cost $0.37 per
pound. Order cost, including transportation, is $1,500. Lead time is normally two weeks but may
vary somewhat. Because of this variability, the company estimates that the lead time demand for
chilli peppers follows approximately a normal distribution with mean of 28,100 pounds and a
standard deviation of 4,000 pounds. Management wants to determine the optimal ordering policy
for chilli peppers to meet a desired service level of 99%.
Mexician packages the sauce in oneounce plastic containers it buys from Polymer Plastics
Company at $0.003 per unit. The ordering cost is $130. Mexician is contemplating leasing a
machine to make the containers. The yearly lease cost of the machine is $45,000, and the
production setup cost of the machine is $260. The machine can produce 1.1 million containers
per day at a per unit cost of $0.0027 (excluding leasing, inventory holding and production setup
costs). The company estimates that it requires 453,000 containers per day. Management wants to
determine whether it should continue purchasing containers from Polymer Plastics Company or
begin inhouse production and what the optimal policy should be.
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Case 2: Global Travel Agency (50%)
Having run a successful travel agency in Lugano, Switzerland, Sara Bally has decided to open a
branch in Bern, Switzerland. She must decide where to locate her office and which and how many
employees to hire.
Sara has narrowed her choice of office to two locations. The one on Nordweg Road is a large office
with space for virtually any number of employees and customers. Sara estimates that the agency
can attract an average of 13 customers per day at this location. Rent for this office is Swiss Franc
1,200 per month. Utilities, insurance and other expenses should average an additional Swiss Franc
520 per month.
The second choice for an office is on Zeltweg Street, approximately two blocks off Nordweg Road.
This is a much smaller office that can effectively only hold one worker and at most four customers
(including the one being served). It rents for Swiss Franc400 per month. Utilities, insurance, and
other expenses should average an additional Swiss Franc 200 per month. The outoftheway
location would reduce the number of potential customers by 20% and any arriving customer finding
the office full will presumably take his or her business to the other travel agency in town.
Sara has decided that if she opens the Nordweg Road office, she will hire one or more local
employees to staff the office. If she opens the Zeltweg Street office, however, she will hire either
Wendy Green, an experienced travel agent form the Bern area, or a local employee to staff the
office. Sara would have to pay Wendy a monthly salary (including benefits) of Swiss Franc 2,100,
whereas she could hire local employees for Swiss Franc 1,200 per month (including benefits).
Because of her experience, Wendy’s average customer service time is approximately 20 minutes,
compared to 48 minutes for local employees.
Sara estimates that each customer served by the Global Travel Agency will result in an average
commission of Swiss Franc 35. She also estimates a goodwill cost to the firm of Swiss Franc 15 per
hour for the time a customer spends waiting in the office for service to begin. In addition, goodwill
costs of Swiss Franc 50 are associated with any customers who find the Zeltweg Street location full
and leave to go to another travel agency.
The travel agency will be open an average of 20 days per month, eight hours each day. Customers
arrive according to a Poisson process, and customer service times follow an exponential distribution.
Determine the most cost effective option for Global Travel Agency.
Fundamentally talk about the commitment which sets of principles issued by proficient bodies, for example, RICS can make to the conduct and lead of their individuals who are either workers in privatepractice or representatives in associations. Exclusively and,in affiliation, on the whole, the callings 'hit a deal with society'in which they trade fitness and uprightness against the trust of customer andcommunity, relative opportunity from lay supervision and obstruction, protectionagainst inadequate rivalry and significant compensation and highersocial status. Proficient implicit rules, when rigorouslycommunicated and authorized, contribute generously to the best possible conduct andconduct of individuals from the associations which issue them. Rueschemeyer's introductoryreference (1983, refered to in Eraut, 1994) to the deal that expert organisationsstrike with society outfits a setting for basically assessing the conceptof proficient sets of principles which can be considered to in any event partiallyformalize the deal with society and in addition the impacts of these codes onthe conduct and direct of individuals from proficient associations who areengaged in private practice or who are workers of different associations. To set up afoundation for the examination, the expert association will be contrasted andcontrasted and different sorts of associations, and the idea of codes ofconduct will be investigated. The concentration will then move to a dialog of theeffects of implicit rules issued by proficient associations on memberbehaviour. At long last, conclusions will be exhibited. The Professional Organization: Comparisonand Contrast with Other Organizations Robbins(1998) characterizes an association as: A deliberately organized socialunit, made out of at least two individuals, that capacities on a moderately continuousbasis to accomplish a shared objective or set of objectives. Asinine (1998) depicts associations as (1) social elements that (2) are objective coordinated, (3) aredesigned as purposely organized and composed movement frameworks, and (4)are connected to the outside condition. Associations are shaped for a varietyof reasons including those that are begun for open and private purposes,for seeking after business and social objectives, and for benefit or non-benefit comes about. A professionalbody meets the criteria for an association as distinguished by Robbins andDaft. The expert body is a particular kind of association, for the most part non-benefit, that exists to promote aparticular calling, to secure both people in general intrigue and the interests ofprofessionals (LaborLawTalk.com, n.d.). The ASEP Newsletter (1998) claimsthat proficient associations are shaped and exist for the reason ofrepresenting the calling, including that this kind of association consistssolely of individuals who are, or mean to be, working in the calling, or havebeen permitted exceptional enrollment status. A more full portrayal of these sorts of associations is offered by the Canadian Security Administrators (2004), which states in this cited remove that an expert body: . concedes individuals basically based on their educationalqualifications; . requires its individuals to consent to the expert benchmarks ofcompetence and morals recommended by the association; and . has disciplinary forces, including the ability to suspend or oust amember. Theconcept of calling is vital to the comprehension of professionalorganisations. A calling can be depicted as far as its highlights whichinclude portrayal by an expert association, adherence toprofessional morals and benchmarks, and self-direction of such capacities aseducation, preparing, and accreditation or licensure in the calling. (ASEPNewsletter, 1998). Callings are by and large recognized by occupationalgroup (e.g. specialists, lawyers, surveyors, medical caretakers, advisors, authors, lawenforcement officers). Enrollment in an expert association is frequently arequirement to lawfully rehearse in the calling (LaborLawTalk.com, n.d.). Aprofessional body contrasts from different sorts of associations in that most othersare involved individuals from an assortment of callings. These memberscoordinate their individual capabilities to accomplish an association's finishes. Asingle association may have as its individuals from such diverseprofessions as specialists, attorneys, representatives, workers, and designers. Thisarrangement is absolutely fundamental, yet it has one disadvantage. A common association is exceptionally separate with respect to particular callings. For instance, architects may just interface with different designers inside the association. They have little chance to trade information about their calling with engineers in different associations. Then again, a run of the mill proficient body, through its attention on a solitary calling, gives a gathering to this kind of trade. One ofthe numerous expert bodies is the Royal Institution of Chartered Surveyors(RICS) which advances itself as the biggest association for experts inproperty, land, development, and related ecological issues overall withthe reason for advancing prescribed procedures, direction and purchaser assurance tothe open and to organizations. RICS, which claims 110,000 individuals around the world, isthe driving wellspring of property related learning, giving independent,impartial exhortation to governments and worldwide associations. (RICS Rules ofConduct, 2004) Implicit rules: The Concept Sets of principles in proficient organisationsprovide a kind of social control of aptitude, as per Eraut (1994). Thesecodes help to secure customers against ineptitude, lack of regard, andexploitation. Eraut follows sets of principles to nineteenth century Britain andthe United States where, at the time, government control was not adequatelyprotecting customers. He asserts that specialists concurred that a measure of controlmust be vested in the experts themselves to be successful and, in this way, theprofessional association was conceived. A Code ofConduct is a composed guide that says how individuals ought to carry on. It setsstandards of conduct it says what you ought to do and ought not do. (Wrongdoing andMisconduct Commission, n.d.) Organizations build up sets of principles tocorrect blunders of individual condition, as indicated by Miner (2002). Shafritz(1998) depicts the term implicit rules through its part words: code,which he characterizes as laws, controls, rules, principles, statutes, and conduct,which he characterizes as bearing, conduct, demeaneor, and deportment. His fulldefinition for set of accepted rules is a: particularly recognized rundown of behaviorsthat [has] been considered suitable or sufficiently wrong to have beenincorporated into either laws or controls or strategy articulations. He addsthat an implicit rules barely characterizes what one is to do in a given positionor set of conditions. The term set of accepted rules isfrequently utilized conversely with the term code of morals, however thetwo have distinctive implications as per Shafritz (1998). Codes of conductoffer particular headings on practices expected under different conditions;codes of morals outfit an arrangement of optimistic norms by which to live andwork. Codes of morals are intended to move. Sets of principles are designedto require. Associations that have established sets of accepted rules incorporate revenue driven organizations, industry gatherings, associations, specific vested parties, government offices, schools and colleges, and expert bodies. Not suddenly, a set of principles for an expert body plots the satisfactory or attractive practices and practices of a specific calling, for example, specialists, drug specialists, attorneys, and ethicists (EthicsScan Canada Ltd., n.d.). Steadman et al. (1994, refered to inEraut, 1994), distinguished four arrangements of qualities influencing conduct: legitimate values,values of the calling, estimations of individual experts, and (foremployees of associations) estimations of the utilizing associations. The firm Deloitteand Touche (2003) offers complete direction for creating codes ofconduct. In expressing that there is no pre-bundled verbiage for a code ofconduct, the firm proposes that it be composed in positive, instead of negativeterms, to help advance positive gathering by the target group and subsequently love like positive result regarding conduct. The set of accepted rules should: . utilize basic dialect, be compact, and be promptly comprehended; . not be composed in legalistic terms be that as it may, rather, in wording ofexpected practices; . apply to everybody in the association; and . be amended as expected to reflect changes. Deloitte& Touche suggests in excess of fifty subjects that might be incorporated into codes ofconduct. Some of these that may especially pertinent to sets of accepted rules forprofessional associations incorporate customer benefit, classification, compliancewith proficient benchmarks, freedom, irreconcilable situations, licensure,fraud, individual direct, and protection. What's more, and significantly, the firmrecommends that, notwithstanding expressing expected practices, codes of conductshould incorporate requirement and usage systems that address thenotion of responsibility and teach for inadmissible conduct. The RICS,which was featured before, has an exhaustive, 56-page code of conductcontaining a considerable lot of the subjects suggested by Deloitte and Touche withsections concentrated on individual and expert guidelines, direct ofprofessional exercises and business, hone subtle elements and co-operation,conflicts of intrigue, unbiasedness, and freedom (Royal Institution ofChartered Surveyors Rules of Conduct, 2004). Furthermore, and as proposed by Deloitte and Touche, the RICS has issued a 28-page supplement to the set of accepted rules indicating disciplinary tenets. These standards express the constitution of disciplinary bodies, conceivable contr>GET ANSWER