BBox Inc. produces an integrated circuit, the Black Box XZ, for clients in the US and...

 

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BBox Inc. produces an integrated circuit, the Black Box XZ, for clients in the US and in the EU. The BlackBox comes into three models, P1, P2 and P3. The company assembles the BlackBoxes from subassemblies that are produced in their plants in the US, Taiwan, and China. All of the assembly is performed by their assembly plant in the south of France. Although the subassemblies are the same for all products, the assembly plant introduces some customised features for each customer. This means that a BlackBox that has been produced for one customer cannot be sold to another one. When the product is not delivered within 8 days from the order, BBox has to give their customers a significant discount (35% on the price). The following table illustrates which components are needed for each model of the black box. COMPONENTS NEEDED FOR EACH MODEL sub-1 sub-2 X X X P1 P2 P3 P1 P2 P3 X Assembly costs at the French plant, lead times, and selling prices are as follows: ASSEMBLY ASSEMBLY COST LEAD TIME 3 days 3 days 3 days €1.00 €1.00 €0.50 sub-3 X SELLING PRICE €15.00 €10.00 €6.50 The assembly plant has capacity of 85000 units per month under normal operating schedule. The company has four factories, two in China (Shandong and Zhejiang), one in Taiwan and one in Savannah, GA, USA. The excel file reports production costs, lead times, and capacity of each plant. The excel fille BlackBox_Data_fp.xlsx contains, in addition to this information, shipping costs and monthly demand data for the years 2013 to 2018. Up to this point, the company has never used air transportation, as it was deemed too expensive. The COO at BBox Inc. is under pressure as the company is experiencing frequent delays, which result in a loss for the company as well as in unhappy customers. Given the structure of their production and distribution network, the company schedules production of subassemblies based on a forecast obtained using historical demand data and then customises and ships the product from the assembly plant once the actual order is received. Mid-term Questions The questions are reported here for your convenience. Please answer them on Brightspace and upload your excel files where required. Q1. For the following questions, consider the demand for P2 in the US market (column labeled US_P2 in the excel file). Upload your answer in a word file and upload the appropriate excel file in each answer, even if it is the same file used in another answer. I will need to grade each question separately and anonymously, so I will not be able to look at a different question to check your excel file. Q1a (5 marks) Create a plot of the demand. Describe your observations on the demand. Describe your observations on the demand. Upload a word file with your answer and the excel file containing the plot. Q1b. (20 marks) Calculate three forecasts for January 2019 using the following techniques: i) moving average, ii) exponential smoothing, and iii) regression. Describe your models (in a word file) and also upload your excel file. Q1c. (15 marks) Compare your forecasts to identify which technique works better for this data. Describe your comparison and results (in a word file) and upload your excel file. Q2. For the following questions, consider the cost data (in the SC Data tab) in the excel file. Q2a. (25 marks) Develop a minimum cost network model to decide how much to produce of each subassembly in each plant. Make sure to consider both production and shipping cost. Use demand for December 2018 as the demand in your model. For this model, only consider shipping by sea/truck. Q2b. (15 marks) Refine the previous model to include a provision where if a plant goes completely unused the company reduces its cost by €10000 (HINT: create a binary variable that constrains the capacity of the plant to 0 and is linked to the cost savings). Q3. (20 marks) Perform any other analysis that you might find appropriate and offer a recommendation for the management of BlackBox Inc. BBox Inc. produces an integrated circuit, the Black Box XZ, for clients in the US and in the EU. The BlackBox comes into three models, P1, P2 and P3. The company assembles the BlackBoxes from subassemblies that are produced in their plants in the US, Taiwan, and China. All of the assembly is performed by their assembly plant in the south of France. Although the subassemblies are the same for all products, the assembly plant introduces some customised features for each customer. This means that a BlackBox that has been produced for one customer cannot be sold to another one. When the product is not delivered within 8 days from the order, BBox has to give their customers a significant discount (35% on the price). The following table illustrates which components are needed for each model of the black box. COMPONENTS NEEDED FOR EACH MODEL sub-1 sub-2 X X X P1 P2 P3 P1 P2 P3 X Assembly costs at the French plant, lead times, and selling prices are as follows: ASSEMBLY ASSEMBLY COST LEAD TIME 3 days 3 days 3 days €1.00 €1.00 €0.50 sub-3 X SELLING PRICE €15.00 €10.00 €6.50 The assembly plant has capacity of 85000 units per month under normal operating schedule. The company has four factories, two in China (Shandong and Zhejiang), one in Taiwan and one in Savannah, GA, USA. The excel file reports production costs, lead times, and capacity of each plant. The excel fille BlackBox_Data_fp.xlsx contains, in addition to this information, shipping costs and monthly demand data for the years 2013 to 2018. Up to this point, the company has never used air transportation, as it was deemed too expensive. The COO at BBox Inc. is under pressure as the company is experiencing frequent delays, which result in a loss for the company as well as in unhappy customers. Given the structure of their production and distribution network, the company schedules production of subassemblies based on a forecast obtained using historical demand data and then customises and ships the product from the assembly plant once the actual order is received. Mid-term Questions The questions are reported here for your convenience. Please answer them on Brightspace and upload your excel files where required. Q1. For the following questions, consider the demand for P2 in the US market (column labeled US_P2 in the excel file). Upload your answer in a word file and upload the appropriate excel file in each answer, even if it is the same file used in another answer. I will need to grade each question separately and anonymously, so I will not be able to look at a different question to check your excel file. Q1a (5 marks) Create a plot of the demand. Describe your observations on the demand. Describe your observations on the demand. Upload a word file with your answer and the excel file containing the plot. Q1b. (20 marks) Calculate three forecasts for January 2019 using the following techniques: i) moving average, ii) exponential smoothing, and iii) regression. Describe your models (in a word file) and also upload your excel file. Q1c. (15 marks) Compare your forecasts to identify which technique works better for this data. Describe your comparison and results (in a word file) and upload your excel file. Q2. For the following questions, consider the cost data (in the SC Data tab) in the excel file. Q2a. (25 marks) Develop a minimum cost network model to decide how much to produce of each subassembly in each plant. Make sure to consider both production and shipping cost. Use demand for December 2018 as the demand in your model. For this model, only consider shipping by sea/truck. Q2b. (15 marks) Refine the previous model to include a provision where if a plant goes completely unused the company reduces its cost by €10000 (HINT: create a binary variable that constrains the capacity of the plant to 0 and is linked to the cost savings). Q3. (20 marks) Perform any other analysis that you might find appropriate and offer a recommendation for the management of BlackBox Inc.