Glass is bought into the plant and then sent through a glass furnace and oven. During the

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Question:

Glass is bought into the plant and then sent through a glass furnace and oven. During the process the clips are glued to the glass. After the heat treat oven, the glass is transported via a Jitney to a hold area. The glass must sit into the hold area for 48 hours so that the glue on the clips can cure. After 48 hours the warehouse employees perform a pull-push test with a calibrated tool. The hold area includes hand scanners to read labels on racks. The glass is used by five assembly plants. Brief background: Name of the virtual plant - AMCE Glass Company.

Here are further details of the virtual plant:

Company Name is AMCE Glass Company and is located in Holland Michigan

Annual Volume
326,000 pair of front glass (Left and Right)
175,000 pair of rear glass (Left and Right)

Manufacturing Area:
One Forming Furnace. The oven can press form two pieces of glass at a time, but must be the glass must be of the same side (i.e., 2 right handed or 2 left handed).
Two Clip Machines (one left; one right)
One Heat Treat Oven There are two conveyors running through the oven.
Scrap rate throughout the plant 17.75%

Warehouse:
-25,000 sq. feet
--5 Docks
-4 Jitneys

Suppliers:

-ZooBee Glass Manufacturing Plant - Located in Bay City, MI Dist. 185 miles
-Break-It Glass Manufacturing Plant - Dayton OH Dist. 301 miles
-Snap Tool and Die Stamping Plant - Dallas Texas Dist. 1083 miles

Additional equipment(s):

-Scanner $7,500/each
-Calibrated Pull Tester $ 900/each
-Conveyors $2,000/each
-Jitney: $35,000/each
-Racks are $125,000

Annual cost of adding an employee (including benefits): $65,000

Transortation:

Transport trailer can hold ten (10) rack at a time.
Lease cost for a trailer $1,235/month
New truck $950,000

Changeover time:

Glass forming furnace: 9 hours
Heat Treat Oven: 45 minutes

Other information:

-Output cycle of Glass Forming Furnace: 16 seconds/piece (conveyor runs at 32 seconds and holds two pieces of glass at a time).
-Output cycle time of Heat Treat Oven: 0.2 minutes/piece or 12 seconds (2 conveyors operating simultaneously at a 24 seconds cycle time).
-Each part is packed into a rack that holds 78 pieces and is 8 feet long
-Each full skid is transported from the heat treated area to the warehouse where the glass are held for 48 hours so that the glue can cure.
-It takes a person 13 seconds to check (pull test) the clips on one piece of glass
-If the glass fails, the pull test the operator must remove the glass from the rack and place the defective piece into another rack that is ten feet away from the check area.
-The checker must replace the defective glass with another one from a certified rack of glass.
-Defective rack is return to the production for repair
-Repairs can take up to 10 minutes
-Repaired glass is taken back to the warehouse for another hours of cure time.

Your manager has asked you reduce the piece cost of the incoming material that is used to build the finish product. Hence, s/he has asked you to seek bids from three (3) different suppliers. Here are the options:

-Supplier K: Bid was one (1) cent higher per clip. However, the plant's location is 850 miles closer than the Snap Tool and Die Stamping Plant.
-Supplier J: Bid is six (6) cents lower than the ZooBee Glass Manufacturing Plant. However, the buyer requires a 3-year contact and each rack 3 cubic foot larger than the current one and holds the same amount of glass as the current racks.
-Supplier Z: Bid 2.5 cents lower than rack size is smaller than the ones that AMCE Glass Factory currently will use and holds 6 pieces of glass less than the current rack.

Select the option that will reduce the overall cost and in a PowerPoint presentation present your results and recommendations to a group of Senior Managers.

Supplemental

Explain why you chose one supplier over another.
Briefly discuss how you used forecasting to decide on your supplier.