lead time= 30,75

2 An example of how even a small business can adopt lean productionprinciples in order to realise significant improvements isfound at Sunset Manufacturing Inc. A 35-person, family-owned machine shop. Because of competitive pressures and a business downturn, Sunset began to look for ways to simplify operations and cut costs. At a Kaizen event, it determined that SMED and the 5S approach could yield benefits. Several actions were taken including: Standardizing parts across milling machines Reorganizing the tool room Incorporating the SMED approach in machine setups, and Implementing whatwastermed"dance cards that gave the operators the specific stepsrequired for SMED of various machines and products. The results were impressive and gratifying. Tool preparation time dropped froman average of 30 minutes to less than 10 minutes, isolation and identification of worn toolswas improved, safety and appearance in the tool room due to 58 application was apparent, machine setup time was reduced from an average of 216 minutes to 36 minutes (an 86 percent improvement), and the entire Kaizen event resulted in an estimated savings of R330 000 peryear, with a cost to implement of less than half of that amount. The netimpactwas to allow smaller lot sizesto be run, a 75 percent reduction in setup scrap, a more competitive organizalion to emerge and a morale boost for team members. I QUESTION 3 The following data apply to metal parts produced at Sunset Manufacturing's machine shop. The data are average values representative of the parts made at the respective single-station manned cells. The initial data provided is prior to the Kaizen event. Monthly demand is 18,000 pieces (for each part produced). The average cost per piece is R24; holding cost is 25% and changeover (setup) time for the presses is 228 minutes. The cost of downtime on any given press is R200/hr. Calculate: 3.1 The economic-order-quantity (EOQ) (Round up to the nearest hundred). 3.2 The total inventory cost (TIC) (Round up to the nearest number)