Production planning and inventory

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Program

Susmar Shoes Inc. This is a protected worksheet. You can only enter your decisions
An Integrated Production Planning and Control Case
Team Name or Number, if any
Write Names of all Team Members Last 1 First 1 Last 2 First 2 Last 3 First 3 Last 4 First 4 Last 5 First 5
DEMAND DATA
Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec TOTAL
Demand for Product A n/a 0
Demand for Product B n/a 0
Demand for Product C n/a 0
Total Demand (A+B+C) n/a 0 0 0 0 0 0 0 0 0 0 0 0 0
Rejects Product A (%) 0 0 0 0 0 0 0 0 0 0 0 0 0
Rejects Product B (%) 0 0 0 0 0 0 0 0 0 0 0 0 0
Rejects Product C (%) 0 0 0 0 0 0 0 0 0 0 0 0 0
Material Received (yes or no) yes yes yes yes yes yes yes yes yes yes yes yes
In a more advanced version of this case, percentage of rejects (% of the units shipped) is provided for each product in each month. Also in some months the material may not be received. In this case the reject percentages are set to 0% and the material has been received in all months.
YOUR DECISIONS : You have to make nine decisions highlighted in the yellow color rows below
Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
RAW MATERIAL ANALYSIS AND ORDER
Opening Balance n/a 15000 15000 15000 15000 15000 15000 15000 15000 15000 15000 15000 15000
Available for Production n/a 15000 15000 15000 15000 15000 15000 15000 15000 15000 15000 15000 15000
Used for Production n/a 0 0 0 0 0 0 0 0 0 0 0 0
Closing Balance 15000 15000 15000 15000 15000 15000 15000 15000 15000 15000 15000 15000 15000
Material Received (ordered last month) n/a 0 0 0 0 0 0 0 0 0 0 0 0 0
Material Received (pending orders) n/a 0 0 0 0 0 0 0 0 0 0 0 0 0
Total Material Received n/a 0 0 0 0 0 0 0 0 0 0 0 0 0
Material not received (ordered last month) 0 0 0 0 0 0 0 0 0 0 0 0 0 0
DECISION: Raw Material Ordered 0 0
NUMBER OF SHIFTS TO OPERATE
DECISION: Number of Shifts ( 1 or 2) 1
OPERATING LEVEL (OL)
Maximum Opearting Level (MOL) in Regular Time n/a 19000 19000 19000 19000 19000 19000 19000 19000 19000 19000 19000 19000 228000
DECISION: Operating Level (OL) 10000 0
Additional Over time Capacity (OT) n/a 0 0 0 0 0 0 0 0 0 0 0 0 0
Maximum Production Capacity MPC = (OL+OT) n/a 0 0 0 0 0 0 0 0 0 0 0 0 0
DECISION ABOUT THE PRODUCTION LEVEL OF EACH PRODUCT: TOTAL PRODUCTION LEVEL SHOULD BE LESS THAN OR EQUAL TO MAXIMUM POSSIBLE PRODUCTION LEVEL
Maximum Production Level (MPL = min of MPC / RM) n/a 0 0 0 0 0 0 0 0 0 0 0 0 0
DECISION: Production Level of Product A n/a
DECISION: Production Level of Product B n/a
DECISION: Production Level of Product C n/a
Production Level PL (PL <= MPL) Total n/a 0 0 0 0 0 0 0 0 0 0 0 0 0
Overtime Production 0 0 0 0 0 0 0 0 0 0 0 0 0
DECISION ABOUT THE SEQUENCE OF PRODUCTION
DECISION: First Sequence Position B
DECISION: Second Sequence Position C
DECISION: Third Sequence Position A
ANALYSIS OF FINISHED PRODUCTS INVENTORY
Product Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
Opening Balance A n/a 0 0 0 0 0 0 0 0 0 0 0 0 0
Opening Balance B n/a 0 0 0 0 0 0 0 0 0 0 0 0 0
Opening Balance C n/a 0 0 0 0 0 0 0 0 0 0 0 0 0
Backlog (Shortage) A n/a 0 0 0 0 0 0 0 0 0 0 0 0 0
Backlog (Shortage) B n/a 0 0 0 0 0 0 0 0 0 0 0 0 0
Backlog (Shortage) C n/a 0 0 0 0 0 0 0 0 0 0 0 0 0
Units to be dispatched A n/a 0 0 0 0 0 0 0 0 0 0 0 0 0
Units to be dispatched B n/a 0 0 0 0 0 0 0 0 0 0 0 0 0
Units to be dispatched C n/a 0 0 0 0 0 0 0 0 0 0 0 0 0
Available for dispatch A n/a 0 0 0 0 0 0 0 0 0 0 0 0 0
Available for dispatch B n/a 0 0 0 0 0 0 0 0 0 0 0 0 0
Available for dispatch C n/a 0 0 0 0 0 0 0 0 0 0 0 0 0
Units dispatched A 7000 0 0 0 0 0 0 0 0 0 0 0 0 0
Units dispatched B 3000 0 0 0 0 0 0 0 0 0 0 0 0 0
Units dispatched C 2000 0 0 0 0 0 0 0 0 0 0 0 0 0
Ending Inventory A 0 0 0 0 0 0 0 0 0 0 0 0 0
Ending Inventory B 0 0 0 0 0 0 0 0 0 0 0 0 0
Ending Inventory C 0 0 0 0 0 0 0 0 0 0 0 0 0
Shortage A 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Shortage B 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Shortage C 0 0 0 0 0 0 0 0 0 0 0 0 0 0
COST CALCULATIONS
Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
Change in Shifts n/a $ 3,000 $ - 0 $ - 0 $ - 0 $ - 0 $ - 0 $ - 0 $ - 0 $ - 0 $ - 0 $ - 0 $ - 0 $ 3,000
Change in Production Level n/a $ 6,000 $ - 0 $ - 0 $ - 0 $ - 0 $ - 0 $ - 0 $ - 0 $ - 0 $ - 0 $ - 0 $ - 0 $ 6,000
Overtime Cost n/a $ - 0 $ - 0 $ - 0 $ - 0 $ - 0 $ - 0 $ - 0 $ - 0 $ - 0 $ - 0 $ - 0 $ - 0 $ - 0
Underutilization Cost n/a $ - 0 $ - 0 $ - 0 $ - 0 $ - 0 $ - 0 $ - 0 $ - 0 $ - 0 $ - 0 $ - 0 $ - 0 $ - 0
Ordering Cost n/a $ - 0 $ - 0 $ - 0 $ - 0 $ - 0 $ - 0 $ - 0 $ - 0 $ - 0 $ - 0 $ - 0 $ - 0 $ - 0
Carrying Cost Raw Material n/a $ 2,250 $ 2,250 $ 2,250 $ 2,250 $ 2,250 $ 2,250 $ 2,250 $ 2,250 $ 2,250 $ 2,250 $ 2,250 $ 2,250 $ 27,000
Carrying Cost Finished Goods n/a $ - 0 $ - 0 $ - 0 $ - 0 $ - 0 $ - 0 $ - 0 $ - 0 $ - 0 $ - 0 $ - 0 $ - 0 $ - 0
Cost of Late Deliveries n/a $ - 0 $ - 0 $ - 0 $ - 0 $ - 0 $ - 0 $ - 0 $ - 0 $ - 0 $ - 0 $ - 0 $ - 0 $ - 0
Sequence Cost n/a 900 0 0 0 0 0 0 0 0 0 0 0 $ 900
Total Cost $ 12,150 $ 2,250 $ 2,250 $ 2,250 $ 2,250 $ 2,250 $ 2,250 $ 2,250 $ 2,250 $ 2,250 $ 2,250 $ 2,250 $ 36,900
Total Cumulative Cost $ 12,150 $ 14,400 $ 16,650 $ 18,900 $ 21,150 $ 23,400 $ 25,650 $ 27,900 $ 30,150 $ 32,400 $ 34,650 $ 36,900
REJECTS
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Rejects to be Replaced (A) 0 0 0 0 0 0 0 0 0 0 0 0 0
Rejects to be Replaced (B) 0 0 0 0 0 0 0 0 0 0 0 0 0
Rejects to be Replaced (C) 0 0 0 0 0 0 0 0 0 0 0 0 0
REVENUE ESTIMATES
Dispatched Rejected Delivered
Total Good Units - 0 - 0 - 0
ITEM Quantity Price Revenue
Good Units Delivered - 0 17 $ - 0
Units Rejected - 0 11 $ - 0
Finished Good Inventory at the End of December - 0 12 $ - 0
Raw Material Inventory at the End of December 15,000 6 $ 90,000
Total Revenue $ 90,000
COSTS ESTIMATES
ITEM Quantity Cost/Unit Cost
Beginning Inventory 15,000 $ 6.00 $ 90,000
Raw Materials - 0 $ 6.00 $ - 0
Other Supplies - 0 $ 1.00 $ - 0
Direct Regular Time Labor Cost - 0 $ 2.00 $ - 0
Overheads $ - 0
Operating Costs $ 36,900
Bringing to Single shift at the end $ - 0 This cost not applicable in Susmar game. It is set to zero. This cost is relevant in Gumazan.
Total Cost $ 36,900
Total Profit $ 53,100
THE FOLLOWING ARE THE CALCULATIONS FOR INTERMEDIATE STEPS
Overtime (0 for 2 shifts, 1 for 1 shift) 0 0 0 0 0 0 0 0 0 0 0 0
Overtime Units 0 0 0 0 0 0 0 0 0 0 0 0
Underutilization Units 19000 19000 19000 19000 19000 19000 19000 19000 19000 19000 19000 19000
sequence change First 1 0 0 0 0 0 0 0 0 0 0 0
Second 0 0 0 0 0 0 0 0 0 0 0 0
Third 0 0 0 0 0 0 0 0 0 0 0 0
number of sequence changes 1 0 0 0 0 0 0 0 0 0 0 0
Production Level (PL) Total 10000 0 0 0 0 0 0 0 0 0 0 0 0
Whether a product can be scheduled or not? A N N N N N N N N N N N N
or not B N N N N N N N N N N N N
C N N N N N N N N N N N N
Operating Level 10000 0 0 0 0 0 0 0 0 0 0 0 0
5
20
15

Data

FIXED DATA FOR THE MANAGEMENT GAME
Raw Material Cost per Unit $6.00 Single Shift Capacity 10,000 Percentage of Rejects 0.00%
Ordering Cost per Order $1,500.00 Maximum Over Time Capacity (single shift) 2,000 Selling Price per Unit $17.00
Inventory Cost/Unit/Month Two Shift Capacity 19,000 Selling Price of Rejects per Unit $11.00 N/A in this version of the case
Raw Material $0.15 Cost of Changing from 1 to 2 Shifts $4,000.00 Selling Price per Unit of Excess Raw Material $6.00
Finished Goods $0.25 Cost of Changing from 2 to 1 Shift $3,000.00 Selling Price per Unit of Excess Finished Goods $12.00
Supplies Cost per Unit $1.00 Cost of changing production level/1000 Units $600.00 Penalty per Month for Late Delivery $1.00
Cost of Idle capacity per 1000 Units $250.00 Regular Time Labor Cost per Unit $2.00
Lead Time 1 month Set up cost $900.00 Over Time labor cost/unit $3.00 50% more than the regular time labor cost.
Overhead Cost (% direct regular time labor cost) 200
Fixed Data for the Susmar Shoes, Inc.
Raw Material Cost per Unit $6.00 Single Shift Capacity 10,000 Percentage of Rejects 0.00%
Ordering Cost per Order $1,500.00 Maximum Over Time Capacity (single shift) 2,000 Selling Price per Unit $17.00
Inventory Cost/Unit/Month Two Shift Capacity 19,000 Selling Price of Rejects per Unit $11.00 N/A in this version of the case
Raw Material $0.15 Cost of Changing from 1 to 2 Shifts $4,000.00 Selling Price per Unit of Excess Raw Material $6.00
Finished Goods $0.25 Cost of Changing from 2 to 1 Shift $3,000.00 Selling Price per Unit of Excess Finished Goods $12.00
Supplies Cost per Unit $1.00 Cost of changing production level/1000 Units $600.00 Penalty per Month for Late Delivery $1.00
Cost of Idle capacity per 1000 Units $250.00 Regular Time Labor Cost per Unit $2.00
Lead Time 1 month Set up cost $900.00 Over Time labor cost/unit $3.00 50% more than the regular time labor cost.
Overhead Cost (% direct regular time labor cost) 200