3200 Operation Management Assignment

[8 points] Suppose that Coca Cola bottling plants are currently experiencing a situation in which capacity exceeds demand. List and briefly describe two capacity based and two demand based options for Coca-Cola to address this problem Capacity 1… …. …. …. Capacity 2… …. …. …. Demand 1. .. …. …. Demand 2 …. .. …. Galls firm has the following supply, demand, cost, and inventory data. Allocate production capacity to meet demand at a minimum cost. Month Forecast Demand Regular Time Capacity Overtime Capacity SubcontractCapacityFebruary 500 400 80 100March 650 400 80 100April 700 500 100 100May 450 500 100 100 Beginning Inventory (BI) = 200 units, held at zero cost.Regular Time (RT) cost = $1 per unit.Overtime (OT) cost =$1.50 per unit.Subcontract (SC) cost = $2 per unit.Back-order cost = 50 cents per unit per month.Holding cost = 20 cents per unit per month. Find the optimal plan and place it in the diagram on the next page? (12 points) Requested in MonthSuppliedfrom February March April May Unused CapacityLeft Total Capacity Available # $ # $ # $ # $ B. I. RT Feb OT Feb SC Feb RT Mar OT Mar SC Mar RT Apr OT Apr SC Apr RT May OT May SC May Demand Find the total cost in $s? [3 points] … [16 points] Consider the following Bill of Materials and MPS for the assembly of Item Cart. Part Projected Inventory Units On Hand Lead Time (days) Made of items Lot SizeCart 0 2 Axle + Box LFLAxle 10 1 2 Wheels LFLBox 5 2 Axle + Frame LFLWheel 70 3 bought 100Frame 5 4 bought 20 There are no Scheduled Receipts.Note: not all items are Lot-for-Lot. (LFL) MPS: You have received only one order to deliver 15 finished carts from your factory on Day 10. Draw the Bill of Materials below (1 point) Please complete the following Gross Materials Requirements Plan (MRP) tables on the next page. (15 points 3 per sheet) AbbreviationsGR = Gross RequirementsPOH = Projected On HandNR = Net RequirementsPOR = Planned Order RequirementsPOR = Planned Order Release Part Day1 Day2 Day3 Day4 Day5 Day6 Day7 Day8 Day9 Day10Cart GR POH NR POR POR Axle GR POH NR POR POR Box GR POH NR POR POR Wheel GR POH NR POR POR Frame GR POH NR POR POR Huckaby Motor Services, Inc. rebuilds small electrical items such as motors, alternators, and transformers, all using a certain type of copper wire. The firms demand for this wire is approximately normal, averaging 20 spools per week, with a standard deviation of 6 spools per week. The purchase cost per spool is $24; ordering costs are $25 per order; inventory holding cost is $4.00 per spool per year. Acquisition lead time is four weeks. The company works 50 weeks per year, each week has 5 working days. What is the EOQ for the spools in units … … What are the safety stock and reorder point if the desired service level is 90%? Safety Stock = .. ROP = ……. What are the total overall costs for the year? … …. What is the companys annual inventory turnover? … .. How would the reorder point change if a higher service level is desired? ( … Why? FormulaeInventory for Fixed Quantity Inventory Systems with Continuous Monitoring: EOQ = ??((2*D*S)/H) Note: use the same units of time in all equations Where D is the annual demand, S is the ordering cost per order, and H is the annual holding per unit. Orders per year = N = D/EOQ; Time between orders = T = 250/N where there are 250 working days in a year. Safety Stock (SS) = Z * ??((LT*?Ÿd^2+d^2*?ŸLT^2))Where LT is the average lead time, d is the average demand, ?Ÿd^ is the standard deviation of demand, and ?ŸLT^ is the standard deviation of lead time. Reorder Point (ROP) = d * LT + SS Average Inventory level = EOQ/2 + SS Inventory Turnover = (Annual Demand)/(Average Inventory) Annual Ordering Cost = N * S Annual Holding Cost = Average Inventory Level * H Total Annual Inventory Cost = Annual Ordering Cost + Annual Holding Cost Total Annual Cost = Annual Ordering Cost + Annual Holding Cost + (Unit purchase cost) * D Z Factors for Specified Service Levels (% certainty of not running out of inventory): Service Level Z Factor50% 0.00080% 0.842 85% 1.036 90% 1.282 95% 1.645 99% 2.326

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