SCM 300 - Lab 06 Projects, Metrics, and Quality RELIABILITY (1 Point per question) A certain company produces 10,000 tables per year in a three-step process. The three steps in the process employ machines with the reliabilities listed here: Step A - 0.987 Step B - 0.979 Step C - 0.915 1. What is the reliability of the present process? Provide reliability to three digits. 2. How many defects does this process presently produce annually? Round up to get a whole number. 3. If the cost per defective unit is $67.00, what is the annual cost of defects to the company at this time? 4. The company can choose to buy a back-up machine for Step C for an additional $20,000. The back-up would also have a reliability of 0.915, just like the one that is presently used. If they decide to get this backup machine, what will the new reliability of the system be? Assume that once a machine malfunctions, the process continues to produce product, acceptable and defective. Use THREE decimal places in you calculations. 5. With the back up in place, how many defects will the process produce annually given the same demand rate? Round up to get a whole number. 6. How much do they stand to save this year if the cost of the back-up machine is included in your calculation? Remember to include the cost of the back-up into your calculations. SUPPLY CHAIN METRICS - PROCESS VELOCITY (2 Points) A computer technician arrives at work at 9AM and finds a department manager delivering three malfunctioning laptop computers. The computer technician begins to repair the problems as soon as possible. The technician begins on the first computer and does not start the second computer until the first is repaired. The technician works on only one computer at a time. The technician takes a lunch break from 12-1PM. The first computer is repaired by 10am The second computer is repaired by 11:30am The third computer is repaired by 4PM . 7. What is the total process velocity? HINTS: All jobs are there at 9am. Each job leaves when it is completed. Take the total throughput for all three jobs and divide it by the total value added for all three jobs. SUPPLY CHAIN METRICS - CASH TO CASH CYCLE (2 Points) A certain company sells 750 units of inventory per day They sell the inventory to their customers at a price of $50 per unit They purchase the inventory at a cost of $20 per unit Present inventory level = 6,000 units Present Accounts Payable = $60,000 Present Accounts Receivable = $225,000 8. Calculate the cash to cash cycle? 1 SCM 300 - Lab 06 Projects, Metrics, and Quality PROJECT MANAGEMENT - Critical Paths and Crashing You are a contractor that has been asked to build an apartment complex. The associated AON Network diagram and the Time/Cost table are provided below. (Based on the table, you could crash activity B for one week only at a cost of $250 or two weeks for $500.) The owner wants the apartment complex built in 29 weeks. The owner will charge a penalty cost of $1500 per week if the complex is not completed on time. A-8 C-5 F-4 E -8 B-5 H-4 D- 6 G -6 Activity Normal Time Minimum Time Crash Cost per Week A 8 7 200 B 5 3 250 C 5 3 1750 D 6 5 500 E 8 5 1500 F 4 3 1200 G 6 5 1000 H 4 2 2000 PART 1 - CRITICAL PATHS Find the duration of each of the possible paths. ACEFH ADEFH - ACEGH - ADEGH - BDEGH - BDEFH - 9. What is the Critical Path? What is the duration of this project presently? 10. What would be the penalty associated for the project in the current state? PART 2 - SLACK TIMES 11. Which activities currently have slack? In other words, which activities are NOT presently on the Critical Path? A B C D E F G H Prep for 12 and 13: What is the longest path (in terms of time) for ONLY those items with slack? For Example: Suppose C's longest path was ACEFG at 45 day (Not true, of course) you would write C - ACEFG 12. What is the actual slack time for activity F? 13. What is the actual slack time for activity A? Hint for 12 and 13: What is the difference between each of the paths listed in question E and the critical path? (This tells you how long each activity listed in question E can be delayed without affecting the Total Project Time with the present Critical Path.) If the item is on the Critical path it will have 0 slack. 2 SCM 300 - Lab 06 Projects, Metrics, and Quality CRASH FIRST ITEM Crash the project by 1 week by altering the activity that will save us the most money. 14. Which activity will you crash first? Make the necessary change to your network diagram. ACEFH ADEFH ACEGH ADEGH - BDEFH - BDEGH - 15. What is the resulting critical path (or paths) and also the new project duration? 16. How much money did you save (net savings) by crashing this activity? Net Savings = 1 Week Penalty Saved - 1 Week Crash Cost CRASH SECOND ITEM Again, crash the project by 1 week by altering the activity that will save us the most money. 17. Which activity will you crash second? Make the necessary change to your network diagram. ACEFH ADEFH ACEGH ADEGH - BDEFH - BDEGH - 18. What is the resulting critical path (or paths) and also the new project duration? 19. How much money did you save (net savings) by crashing this activity? Net Savings = 1 Week Penalty Saved - 1 Week Crash Cost CRASH THIRD ITEM Crash the project by 1 week by altering the activity that will save us the most money. This will get us to the desired completion date that will eliminate the penalties. 20. Which activity will you crash third? Make the necessary change to your network diagram. ACEFH ADEFH ACEGH ADEGH - BDEFH - BDEGH - 21. What is the resulting critical path (or paths) and also the new project duration? 22. How much money did you save (net savings) by crashing this activity? Net Savings = 1 Week Penalty Saved - 1 Week Crash Cost TOTAL SAVINGS 23. How much did you save, in total by crashing the system down to 29 weeks? 3