MGMT339 Assignment 3 - Chapters KS, KO, & K3 (Show your work to receive credit) 1. The following table provides information on a process, whose sequence of flow is A > B (any available equipment can be used) > C > D (any available equipment can be used): (a) Calculate the overall daily design capacity and effective capacity for the entire process. Assume effective capacity is a planned usage of design capacity to ensure sustained operation (ie. for each operation, effective capacity = design capacity x planned utilization). Assume 8 hours a day. (b) If we increase the design capacity of the equipment for Operation C by 15 percent, what would be the new design capacity and effective capacity for the entire process? Operation # of Equipment Design Capacity Planned Utilization (by equipment) overall) A 560 units/hr 87% 145 units/hr B 4 115 units/hr 150 units/hr 81% 165 units/hr C 535 units/hr 94% D 2 310 units/hr 285 units hr 75% 2. Carter Motor Company assembles and sells small motors used in appliances. Average demand for its bestselling motor is 600 units per day. The assembly line operates continuously during a single eight-hour shift. The tasks required, task times, and precedence relationships are: Task Time (seconds) Predecessors 12 20 18 30 B. D 17 E 25 F. G 20 H (a) What is the number of motors that can be produced by a single station? "b) What is the maximum number of motors that can be produced? (c) What is the desired cycle time? (d) What is the theoretical minimum number of workstations? (e) Assign the tasks to the workstations to balance the line using the longest work element rule. (f) What is the efficiency of the balanced line?3. Suppose you have been given the task of reducing inventory m your company, without negatively impacting customer service. (a) What are some actions you might be able to take to reduce cycle stock? Explain why your action would reduce cycle stock. (b) What are some actions you might be able to take to reduce safety stock? Explain why your action would reduce safety stock. 4. The followimg table contains data about the inventory at Jones Corporation for the fiscal year that just ended. Beginning Unit Inventory | Ending Unit Inventory | Item Unit Cost | Annual Unit Sales 285,000 ; 263,000, I $67.00 | 732,000 (a) Compute the average unit inventory for the fiscal year. Then compute inventory turnover using dollar values of annual sales and average inventory. (b) Suppose Jones Corporation determined that its annual inventory holding cost = 23% of inventory value. Compute the average inventory holding cost. (c) Suppose Jones Corporation believes that im the upcoming year, the rate of sales expected is 14,200 units per week. Compute the weeks of supply. Which unit inventory should you use for weeks of supply? Why? 5. Comfort Inc. sells ergonomically designed office chairs. The company has the following information: Average demand = 25 chairs per day Trem unit cost = $40/chair Average supplier lead time = 3 days Ordering cost = $15/order Annual inventory holding cost = 35% of inventory value The company operates 52 weeks per year, 5 days per week. (a) How many chairs should the firm order each time? Assume there is no uncertainty at all about the demand or the lead time. (b) What will be the total annual cycle-inventory cost and its breakdown of costs? (c) What will be the finm's average cycle inventory? (d) What will be the annual inventory tumover rate (using unit sales and unit inventory)? (e) Explain the relationship (tradeoff) between inventory holding costs and ordering costs in the economic order quantity. How does EOQ change when demand, ordering cost, and inventory holding cost imcrease decrease? 6. (a) Name and explain major cost categories identified by COQ. (b) Why is quality af the source better than quality through inspection