Little Field

Here there is an excess supply amount, so there are more computers than that are actually wanted. At this point, the sellers would recognize there are fewer buyers for their product at the current set

increase, throughput increases exponentially thereby creating an inefficient operation and limiting profitability. Based upon this evaluation, Team A decided that it was prudent to purchase another tuning machine for Station 3 as soon as the cash balance reached $175,440 ($100,000 machine cost, $74,440 raw material cost, $1,000 order cost). Due to Station 1 often hitting 100% utilization, Team A decided to evaluate the need to purchase another board stuffing machine in the future.

We recalculated the average arrival rate over the entire simulation to be approximately 11.8 orders per day, which we rounded to 12 for a small buffer. Based on this daily consumption, we found what day the next reorder point would be which was day 222. We wanted to find the demand for the final 46 days with an average of 12 orders per day came up with a figure of 552 units needed to meet demand over the last 46 days. Since we already had 61 units at the time of ordering, we subtracted that figure from the 552 and came up with a final order value of 491. This value should allow us to have a low inventory level at the end of the simulation. To achieve this, we had to change the reorder point to zero. This strategies hinges heavily on the lab not being in existence past day 268, if that were not the case, we would not recommend this plan.

Keep using the old machine incurs higher cost(higher EAA) than replacing it with the new one. Therefore assuming sales are equal for both cases, when sales is smaller than 328338.07 and greater than 434036.67, Fonderia di Torino S.p.A should definitely replace the old machine with the new automated machine.

According to our analysis, So , c) is a betterthe optimal choice whichchoice, which confirmed our aggressive machine buying strategy since Day 135. And on Day 149, and Day 170, we immediately bought machine for station 2 and 1 again when the stationsit becomes bottle neck or when lead time is more than 0.28 which caused revenue decreased to $1,200.

Now we can apply Little’s Law to calculate the throughput time which is equal to the manufacturing lead time in this case.

Steve was concerned about the potential loss of customers and suggested that Prairie Winds purchase a second pasta production machine for $40 million. The company had excess space in the existing facility that could be used for the new machinery. However, this space currently was leased to another company on a year-to-year basis and was generating annual rent of

The company is currently using a CNC machine for orders for equal or greater than 140 boards due to capacity of a CNC machine; however, they would be able to process all orders with CNC machines if they add one more machine.

Further, machines continued to break down because of non-functioning motors and were exposing workers to considerable safety concerns. Therefore, fewer machines were being used and in turn increased demand, which in turn further increased delays of meeting customer demand for the products.

For our warehouse, we needed to establish a reorder point. If our reorder point was too low the warehouse will see that we reached our benchmark and call the factory to shut down. To ensure that this case would not happen, we set the reorder

ML had developed a policy of selling manual machines and renting automatic machines. Manual machines did not cost much, did not require service, and could be modified to attach different fasteners inexpensively. Automatic machines were rented on an annual basis because they would have been more expensive to sell and it provided annual income to ML. However, about 700 of the rented machines were returned each year. During the time that machines were in inventory, ML would modify the machines to attach different fasteners. This was expensive with an average cost per modification of $2000. If all 700 machines were modified during a given year this would have cost $1.4 million per year. It was also industry practice to provide preventative maintenance and

Andres was forced to import product from French division as he ran out of capacity several times due to new machines performing inadequately. This added an overhead expense of approximately 2147 (Additional maintenance costs + Transfer costs)

Bergerac can opt for the buy option and implement its backward integration by acquiring GenieTech. GenieTech can provide the company with eight efficient molding machines for the acquisition price of $ 5.75 million. The price includes experienced labor force and management. Bergerac can fulfill its chemical reagent demand by using 4 out of 8 moulds provided in the acquisition. Rest of the presses can be used in the expansion process or can be used to meet the demand of a third party. This investment can result in the reduction of overhead expenses by twenty six percent per unit. Bergerac can pay the amount over a period of five years making the project

This new computer’s production was scheduled to begin in 10 days. Initial production for new model was to be at 150 units/day, increasing to 250 units/ day the following week. Eventually production should reach 300 units/ day.

Friendly Cards would be able to purchase the machine for $500,000. This machine would be able to produce the same amount of envelopes that it is currently purchasing for 1.5 million in 1987. The