You are the vice president of operations for a U.S.-based software firm that is exploring building a software design operation in India. Typically when international firms enter the Indian market, they quickly learn how a caste system can affect business activities. Although officially banned, the caste system still dictates everyday life for many people in India. You are confident regarding the likelihood of business success there, but you have strong misgivings about the caste system. 1. Do you think it will be possible to import and uphold a U.S. management style in India despite lingering effects of the caste system? 2 How do you think your company’s stakeholders would feel about your company simply adjusting to local management practices?

The Always Fresh Grocery Store carries a particular brand of tea that has the following characteristics:

Sales = 8 cases per week

Ordering cost = $10 per order

Carrying charge = 20 percent per year

Item cost = $80 per case

a. How many cases should be ordered at a time?

b. How often will tea be ordered?

c. What is the annual cost of ordering and carrying tea?

d. What factors might cause the company to order a larger or smaller amount than the EOQ?

2. The local Toyota dealer has to decide how many spare shock absorbers of a particular type to order for repairing Toyota automobiles. This shock absorber has a demand of four units per month and costs $25 each. The carrying charge is 30 percent per year, and the ordering cost is $15 per order.

a. What is the EOQ for this item?

b. How often will the dealer reorder this part?

c. What is the annual cost of ordering and carrying this part?

3. What is the effect on EOQ and total cost of the following types of changes for the data in problem 1?

a. A 40 percent increase in demand.

b. A 20 percent increase in carrying charge.