Owens Miner

Owens and Minor (A) This is a case that has relatively few calculations. However, it is a nice application of how superior costing information send dish alter decisions. Also, it highlights some of the issues involved in regress behavior, particularly crossways organizational boundaries. 1.Evaluate the impact of undetermined set on distributors, customers and suppliers. Distributors (Owens & Minor): Some products are most high-priced to bring off than others. Using a flat 7% across each(prenominal) products provides very different profit margins across products, not a clear 7%. This model is causing O&M to lose profit. Customers are also demanding more(prenominal)(prenominal)(prenominal). Previously, O&M would go to bed a load weekly to the hospital dock. The hospital would accordingly receive and breakdown the shipment. Now, many hospitals are requesting little shipments more frequently, modeling a JIT take stock type system. In addition, some venues are moving toward a stockless system, requiring O&M to package the production in much smaller units, commonly in a plastic tote which would go in short to the nursing and surgical units, bypassing the entire storeroom processes.

The following supererogatory requirements for a sockless or JIT system add superfluous cost, clothe profit margin on a cost irrefutable model; additional line item, reckon of POs, list of deliveries, special packaging requirements, bulk shipment breakdown handling, neckcloth carrying cost for O&M, additional staff required for the additional services. To expres s reduced costs, distributors generally buy ! larger orders from suppliers to stay an economy of scale discount. However, this would require distributors to carry and handle more inventories. Distributors are often carrying receivables much longer than the suppliers payment terms. This puts a constraint on cash. Customers (hospitals and health help centers): Hospitals with stockless systems and high maintenance actually may benefit from a cost plus system. These venues...If you want to get a secure essay, order it on our website: BestEssayCheap.com

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