Task $1$: Match the status code with correct explanations listed in "explanations" by copy & paste. Explanations:

status $20$ available for rent available for rent

status $32$ reserved for shipping defective unit reclassified after test and order sheet sent to Part department

status $40$ defective after received from customer non$-$defective after received from customer

status $24$ non$-$defective after received from customer defective unit reclassified after parts arrived

status $41$ defective unit reclassified after test and order sheet sent to Part department reserved for shipping

status $42$ defective unit reclassified after parts arrived defective after received from customer

Performance Measures

The key performance measure tracked at CRU had been $$utilization$.$ It was defined as

utilization $=$ number of units on rent $-$: number of units owned by CRU

utilization is primarily an inventory$-$related measure and can be restated as

utilization $=$ inventory on rent $-$: total inventory owned by CRU

Task $2$:

What is the average purchase price for each unit in the CRU inventory? $1000$ $

What is the length of period that CRU followed for a straight$-$line depreciation of its inventory asset? $36$ months

Flow Analysis

The next step is to analyze the flows at each stage of the process. First, let us consider last year$$s situation.

What is the rate of demand $($rental occurred at CRU$)?1000$ units$/$week

Since each rental averaged certain number of weeks with the customer, we obtained a flow time of: $8$ weeks

Thus, average inventory at customer $=$ throughput $($number in G$59)$ x flow time $($number in K$60)=8000$ units

There are, on average, $($number in K$61)$ units rented at any time.

We can do a similar analysis to evaluate flow time, inventory, and throughput at each stage as shown below Table $1.$

Task $3$: Assign numbers using formula $($ex$.=$C$60*0\mathrm{.}7$ for cells in Table $1)$ when applicable in orange$-$colored cells, then value $"0"$s will be adjusted accordingly.

Values in blue fonts are given or inferred from the case scenario.

Values in orange$-$colored cells can be derived by Little's Law using numbers provided from the case scenario.

What is the number of units for which the Repair group had requested part, but part order was not yet placed? $500$ units

CRU policy requires to hold inventory to cover two week's demand $(2$ x $1,000$ units$)$

Table $1.$

customer receiving status$24$ status$40$ parts suppliers status$41$ status$42$ status$20$

"throughtput

$($units$/$week$)"100010007004054054054054051000$

"inventory

$($units$)"8000500150010005004059055002000$

"flow time

$($weeks$)"80\mathrm{.}52\mathrm{.}142\mathrm{.}471\mathrm{.}2312\mathrm{.}231\mathrm{.}232$

Task $4$: Fill in the orange$-$colored cells in column $"$H$"$ for the analysis of revenue and cost.

Based on the above data,

total number of units $($obtained by adding the units at each stage$)=14405$

number on rent $($units at customers$)=8000$

So$,$ utilization $($units with the customer $/$ total units owned$)=0\mathrm{.}56$

We can now evaluate the revenue and cost per week for the above system.

Revenue:

Revenue per week $=$ number on rent x rental cost per week $=240000$

Cost:

Cost per week $=$ shipping cost $+$ receiving cost $($shipping$)+$ pre$-$configuration cost $+$ repair cost $+$ depreciation $=205469\mathrm{.}7436$

Shipping cost per week $=25000$

Receiving cost per week $=25000$

Pre$-$configuration cost per week $=2380$

Repair cost per week $=60750$

Depreciation per week $($total units x depreciation$/$unit$/$week$)=92340$

Profit per week $=$ Revenue minus Cost $=34530$

As such, last year, the process generated $ $($number in H$96)$ in profit per week.

Another way to view the economics is as follows. A rented computer has three possible flows depending on its classification at receiving:

$1.$ Classified correctly as status $24($F$1)$: The unit flows from pre$-$configuration to Status $20$

$2.$ Classified incorrectly as Status $24($F$2)$: The unit flows from pre$-$configuration to Status $40$

$3.$ Classified as Status $40($F$3)$: The unit flows from Receiving to Status $40$Task $5$: Evaluate the duration of a cycle, which varies in each case $($duration of F$1$ is given as an example$)$:

Case F$1$: Duration of cycle $=$ Customer $+$ Receiving $+$ Pre$-$config $+$ Status $20=12\mathrm{.}64$