Narragansett Yacht Essay Example

Narragansett Yacht Essay Example Narragansett Yacht Essay Narragansett Yacht Essay 1. What is the economic ordering quantity for standard 5-inch winches if they are ordered from (a) Supplier A, and (b) Supplier B? Round your answers up to the next whole unit, because Narragansett cannot order a fraction of a winch. What assumptions are implied in the EOQ model? Do these assumptions appear reasonable when applied to Narragansett Yacht? How many orders should be placed each year if Narragansett buys from Supplier A? If the firm buys from Supplier B? What is the reorder point (in units) for each supplier? Assume for now that no safety stocks are held and use a 360-day year. Calculate the total inventory cost (the cost of ordering plus the cost of carrying inventories) that Narragansett would incur from each supplier. On the basis of the information developed thus far, which supplier should Narragansett use? Narragansett currently carries a safety stock of 75 winches to protect itself against stockouts due to delivery delays and/or an increase in its usage rate. However, if it decides to switch to Supplier B, Narragansett would need to increase the safety stock to 150 units to reflect Supplier B’s longer lead time. a. Assuming that the desired safety stock is currently on hand, what is the total cost of ordering and carrying inventories, including the safety stock, using Supplier A? What is the cost of using Supplier B? b. How does the introduction of safety stocks affect the reorder points as calculated in Question 3? c. Assume that there is a shipping delay. How many days after an order is placed could Narragansett continue to operate, at its expected usage rate, before its entire stock of 5-inch winches is reduced to zero? Compute this figure for both Supplier A and Supplier B. Narragansett’s production is relatively constant throughout the year, but if its sales and production were highly seasonal, could the EOQ model still be used? If so, would modifications be required? Explain. Suppose Supplier A, the current supplier, offers a 2 percent discount on the $300 per- unit purchase price on orders of 250 or more units. In an attempt to win the contract, Supplier B is also offering a 2 percent discount on ordersof 250 or more. Should Narragansett take the quantity discount from Supplier A? In answering this question, assume that Narragansett holds a 75-unit safety stock. ) What are some methods that Narragansett might use to control the inventory of 5-inch winches? That is, how can it keep track of the number of units in stock and then be sure an order is placed when the order point is reached? In many situations, companies are using just-in-time inventory procedures with good results. What is involved in the JIT approach, and what factors would need t o be considered before you could recommend that Narragansett adopt or not adopt a JIT system

Halifax Analysis Essay Example | Topics and Well Written Essays - 1500 words

Halifax Analysis - Essay Example The service delivery method deployed by Halifax is strongly related to the company's ability to promote and execute to customer needs through professional E-business at http://www.halifax.co.uk/home/index.shtml. This allows the bank to run literally twenty-four hours per day year round. The benefits of this service delivery are the continuity of service, however the detriment may be found in genuine customer service and person to person contact. The professional service deliver for online banking is in high demand. In the long run, there will always be demand for credit cards, mortgages business loans or insurance in one form or another. Financial services are the backbone of our economy and will continue to be for years to come (Davies 1992). Because diversified financials offer such a wide range of products, they are able position their companies to tap changing demand for different products (Davies 1992). World population is continuing to expand at an exponential rate. It is important for companies within the industry position themselves in developing countries to take advantage of exploding populations, especially in emerging countries (Davies 1992). The degree of customer interaction for online banking is low. ... Several online banks also offer 'click to chat' options which allow an online customer to 'chat' with a professional banker. This is not an option available with Halifax. ). Technological innovation has allowed financial companies to automate time and labour intensive processes and enhance their ability to match up borrowers and lenders, regardless of geographic location (Gardener 1988). While Halifax has reached several components of innovative technology by the development of 24-7 online banking, they are severely lacking in the degree of viable customer interactions. Degree of Service Customisation The degree of service customisation is relatively high. Halifax has developed specialised services through online banking for the purpose of gaining new customers and retaining current customers (McDonald 2002). In the degree of customised services, Halifax offers diverse and multiple professional banking services. Expectations are commonly defined as "beliefs about a product that serve as standards or reference points against which product [or service] performance is judged" (Zeithaml et al. 1993, p. 1). To this, Halifax responds by offering direct and easy to navigate professional services. There are icons for nearly all-banking needs that the customer can easily navigate based on their requirements. Halifax also boasts that it will assist the customer in 'switching' banks, which customises the professional service towards new customers. Nature of Service Act The nature of the professional service is strongly E-business The service side concentrates mainly on providing services to the customer. Halifax's customer care section plays an important role on deciding if the company and should be

Theory and concepts of creating a financial model Essay

Theory and concepts of creating a financial model - Essay Example Management should be skeptical of the model assumptions that will be related to the recommendation. There are different types of financial models that are used for various purposes. For example, a cash flow model is regarded as a powerful tool that can assist a financial team with project future performance in a business venture by evaluating the effect of that type transaction such as an an acquisition and LBO(Shim 2007, 67)2. It is also able to calculate returns and perform ration analysis. Financial models for investment options or product services are often custom developed in excel sheets as they take into account for unique characteristics such as cost structure, product market and competitive situation. The following guidelines should be used: Outline the model the type of model structure that would include the general output and the key components.The weight cost and the advantages of the type of model will also be factored in. The forecasting future method should be used in any financial model (Fernholz 2002, 56). When constructing a cash flow model there are a number assumptions that must be included. In this kind of financial model, there is a deterministic approach that uses certain simplifications.Among them is the investment of return that is known and does not usually vary from year to year. Another important aspect is that this rate is the same rate that will be used to discount the reserves and the third aspect is that the ultimate loss ration will be accurately predicted. There are some concepts that one has to know when creating a financial model like a cash flow model. Firstly, you have to have to start with the in mind- This will be inclusive of whether you are pricing options of an investment or building3. With the Cash flow model, you should be able to check for assumptions. From this you would be able to get truthfully generate outputs with a certain number of inputs. This kind of model should be one that you are able to adjust automatic ally and should be dynamic depending on your inputs. This model does not give room for a formula, like for instance, that will multiply a specific number of units with the determined price (Hambrook 2003, 95). This gives room in case the price might change in future. If you use a fixed formula and the prices change in the future, you will be forced to go the right cell of the Excel sheet and make changes every time the price changes. One of the major concerns that most investors have is determining the relationship between the risk and the return of a financial asset. This kind of information can be obtained in his portfolio. It is general knowledge that there is a good relationship between the risk and the expected return of a financial asset. In other words, when the risk of an asset increases, so does its expected return. What this means is that if an investor is taking on a big risk, he is expected to be compensated for doing so with a higher return of sales in the futures. Simi larly, if the investor wants to boost or increase the the expected return of the investment, he needs to be prepared to take on more risk. This is the reason why a portfolio is used to give this important relationship. It is important to note that the concept of Modern Portfolio Theory to show the connection between the risk and return of a portfolio of financial assets. The three types of portfolios that will help us