Chapter 7 (SCM 488)
1. Businesses with a _________ focus make a number of very different products (i.e. high flexibility) of very few units per production run (i.e. low volume).Challengesthese factories face include?
2. A ___________focus factory typically uses few raw material inputs across a low variety of processes. Challengesthese factories face include?
3. A __________focus factory widens the raw material inputs and processes used. It does this through modules. Modules are standardized parts combined in a variety of different ways. Challenges these factories face include?
4. _____________uses many different modules to produce a large variety of customized outputs.Challengesthese factories face include?
5. Equipment can make 100 steel rings per hr. and the equipment is operated 16 hrs./day. 0.6hrs/day used for preventive maintenance, 0.5hr/day used for employee lunch and 2hrs/day is used to set up equipment.
What is (a) equipment design capacity __________________and (b) effective process capacity_____________________? If this process also waits 1 hr/day (due to no parts and machines breakdowns) and runs 5 rings/day scrap, what is the actual expected output_________________________? For this process the utilization is __________% while the efficiency is ______________%.
6. In our ring manufacturing plant, we have 4 operations. When operating at 100% efficiency the process is:
Forging: 6 rings/min/machine. We have 3 presses
Turning: 2 rings/min/machine. We have 10 lathes
Heat treatment:50 rings/min/machine. We have 1 furnace.
Grinding: 1 ring/min. We have 20 grinders.
What is the bottleneck operation_______________? What is the throughput time to make 2,000 rings________________?
7. As plant manager, you need to make a decision whether to invest in a new drill press or a new mill. The drill press will cost $1.2 mill and is forecasted to generate $50,000 of increased sales each year over the next 5 years.
The mill will cost $800k and is forecasted to generate $20,000 of increased sales over the same timeframe. Using NPV and a 10% required rate of return, which is the better investment option?
8. The vice president of production would like your plant to earn $10,000 per month profit on a 5 day per week, 3 shift per day operation.
The fixed cost to run your plant at this level is $50,000 per month. Variable costs are $6.50 per piece. The products you make sell for $9 apiece. How many products do you need to make to achieve the profit target?
9. The fixed cost to run your plant is $80,000. The average selling price for your products is $10 apiece. The scheduling department does not use level-loading based on average demand.
So, from time-to-time, production numbers surge. When production is less than 5,000 pieces the variable cost is $5.50 per piece. At higher production levels (due to overtime and increased maintenance) variable cost rises to $6.75. What are the 2 breakeven points for the plant?
10. You manage a Low Volume : High Variety plant. Fixed cost per month is $75,000 and variable cost is $4.50 per piece. Your director feels certain products could sell much better is manufacturing costs were lower.
She wants to make the investment in equipment to shift the operation to High Volume : Low Variety. Fixed cost will shift to $170,000 and variable cost $2.00 per piece. At what production volume is the High Volume: Low Variety less costly to run?