CRU Computer Rental Case Solutions

Solution 1

TABLE 1: CRU FLOWS | Customer | Receiving | Status 24 | Status 40 | Stored Orders | Orders at Suppliers | Status 41 | Status 42 | Status 20 | | | | | | | | | | | Throughput(Units/Week) | 1000 | 1000 | 1000*.70=700 | 1000*.30+ .15*700= 405 | 405 | 405 | 405 | 405 | 1000 | | | | | | | | | | | Inventory(Units) | 8000= 8*1000 | 500 | 1500 | 1000 | 500 | 405= 405*1 | 500+405 = 905 | 500 | 2000=2*1000 | | | | | | | | | | | Flow Time(Weeks) | 8 | 0.5= 500/1000 | 2.14= 1500/700 | 2.46=1000/405 | 1.23= 500/405 | 1 | 2.23 | 1.23= 500/405 | 2 |

Note:
 Numbers in Black are given
 Numbers in red are calculated by using formula Av. flow time = …show more content…

Note: If a unit is sold after 1 year, its book value will be 1000- (1000/36)*12 = 666.667. Therefore, selling a unit after 1 year will give us $ 666.667
Table below compares the profits for all the options: | | | | | | | Case 1 | Revenue | Variable cost | St. line Dep. | Profit | Changed Revenue after Buy/sell of computer | Changed profit= Changed rev-var. cost-dep. | | | | | | | | Option A | (900*40+300*30+60*25)*52wk=2418000 | 141998.8 | 95673.07692 | 2180328 |