Matching Supply with Demand: An Introduction to Operations Management 4th Edition Solution manual
(a) We can use Little’s law to find the flow rate for associate consultants: Inventory=Flow Rate * Flow Time; 200 consultants=Flow Rate * 4 years; thus, the flow rate is 50 consultants per year, which need to be recruited to keep the firm in its current size (note: while there are also 50 consultants leaving the associate level, this says nothing about how many of them are dismissed vs how many of them are promoted to Manager level).
(b) We can perform a similar analysis at the manager level, which indicates that the flow rate there is 10 consultants. In order to have 10 consultants as a flow rate at the manager level, we need to promote 10 associates to manager level (remember, the firm is not recruiting to the higher ranks from the outside). Hence, every year, we dismiss 40 associates and promote 10 associates to the manager level (the odds at that level are 20%)
Now, consider the partner level. The flow rate there is 2 consultants per year (obtained via the same calculations as before). Thus, from the 10 manager cases we evaluate every year, 8 are dismissed and 2 are promoted to partner (the odds at that level are thereby also 20%).
In order to find the odds of a new hire to become partner, we need to multiply the promotion probabilities: 0.2*0.2=0.04. Thus, a new hire has a 4% chance of making it to partner.
Q2.9. Major US Retailers
- Product stays on average for 31.9 days in Costco’s inventory
- Costco has for a $5 product an inventory cost of $0.1311 which compares to a $0.2049 at Wal-Mart
Q2.10. McDonald’s
- Inventory turns for McDonald’s were 92.3. They were 30.05 for Wendy’s.
- McDonald’s has per unit inventory costs of 0.32%, which for a 3$ meal about $0.00975. That compares to 0.998% at Wendy’s where the cost per meal is $0.0299.
Q2.11. BCH
I = 400 associates, T = 2years. R = I / T = 400 associates / 2 yrs = 200 associates/yr.
Q2.12. Kroger
Turns = R / I = 76858 / 6244 = 12.3