Question

a. Snowman Publishing has to periodically order more paper to print books. The paper comes on roles; they use 32 rolls per week. The cost to order (this includes bookkeeping, trucking and handling) is $25.00. The cost of keeping inventory is $1.00 per week. What is the EOQ for paper rolls for snowman?

What is the time between orders?

b. Completely and thoroughly explain the different types of organizational models and designs that could be used to manage a food manufacturing facility in north Georgia. Be sure to include the reasons why the options you discuss would be an appropriate choice for this type of business.

Answer 1

(A)

Weekly demand (d) = 32 rolls

Ordering cost (S) = $ 25

Annual Carrying cost per week (H) = $ 1

EOQ = 40 units

Number of weeks in a year = 52

Annual demand (D) = 52 × 32 = 1,664 units

Time between orders = (52 × 40)/1664 weeks

Time between orders = 1.25 weeks

(B)

Snowman Publishing can use following type of organizational models:

(i) Horizontal model: A flat or horizontal organizational structure is good for companies that have few levels between upper management and staff level employees. A printing company mighy require less supervision and more involvement from all its employees and the horizontal structure offers that. It also gives employees more responsibility and enhances communication.

(ii) Market based model: In this structure, divisions are separated by market, industry or by type of customer. Snowman Publishing can divide the market by publishing comics for children, school textbooks for students or novels for teenagers and adults.