A manufacturing cell makes two components, X and Y, that are sent to a small assembly area where the two components are then assembled together with a third assembly Z (sourced externally) to produce one end item E. The cell can only make one of the two components at a time. Each end item E requires two of component X, two of component Y, and one of the assembly Z.

The manufacturing cell requires some non-productive setup time to prepare to make either X or Y. Because of this, the cell produces X and Y in batches to minimize the effect of non-productive setup time on the productivity of the operation. Currently the cell produces a batch of 200 of component X, followed by 200 of component Y, and then the cycle repeats itself. Once complete, X and Y are sent to the final assembly area under either a batch or a unit flow concept. There is space at the manufacturing cell to temporarily hold X and Y until moved to assembly if needed.

The final assembly area has storage areas to hold X, Y, and Z that for all practical purposes have no limit to how much they can hold. The inventory of Assembly Z is managed by the vendor that supplies that item under a vendor-managed inventory (VMI) concept. The vendor ensures that sufficient quantities of Assembly Z are on hand at all times to assure that the final assembly area is never starved for Assembly Z. Under the VMI system, the vendor maintains ownership of the assemblies Z in the plant until they are consumed in final assembly. It is only at that point that ownership changes hand and the assemblies Z are paid for. Therefore, the company making end item E is not concerned about the cost of inventory when it comes to Assembly Z.

The final assembly area is dedicated to making end item E when it is not making E it is idle. Once individual end items E are complete, they are moved by automated conveyor belt to the packaging department. Therefore, no inventory of end item E is held in the assembly area.

Following are data on the processing times for the two components and the end item:

Item	Setup Time	Run Time per Unit
Component X	10 minutes	.20 minutes
Component Y	15 minutes	.10 minutes
End Item E	N/A	.50 minutes

Download the Excel template posted at Canvas

1. Draw a flow chart of this process on the sheet labeled Flowchart. Make it as detailed as you see fit and label it as needed. Please use the shape drawing tools in Excel (Insert -> Shapes) to make this easier. A video on how to do so is posted at Canvas (3 points).
2. What is the maximum hourly output of the system (finished goods) in the long run? What is the bottleneck of the process? Use the text boxes on the sheet labeled Output. (2 points)
3. Perform a WIP inventory analysis of both component X and component Y, taking into consideration the final assembly operation. Perform the analysis under the following two scenarios, using the appropriately labeled sheets in the template. In each case, Components X and Y are considered WIP as soon as they are made in the cell until they are consumed in the final assembly process (15 points).
   1. Batch Flow: Components X and Y are not moved to the final assembly area until a full batch is complete. (WIP is stored both in the cell as output and in the assembly area as input.)
   2. Unit Flow: Components X and Y are automatically moved to the final assembly area as soon as each unit is completed by the cell. (WIP is stored in the assembly area only.)

Good inventory analyses will have an inventory level graph that goes long enough to identify a repeating pattern in the graph, and a computation of the average WIP levels for X and Y. Do not differentiate between WIP in the cell and WIP in the assembly area wherever X and Y sit, they are considered WIP until consumed. For both scenarios, ignore the transit time from the cell to the assembly area.

The provided template is formatted and labeled for creating inventory graphs. It is sufficiently large to allow your work, but do not assume that you must fill up all the formatted space. In your work, create a timeline of activities in the main operations to help guide your work (as done in the Problem 14 example in class).

State any assumptions you make in your analysis.