Assignment 10 pages
Babpha
space_age_document.docxSpace Age Furniture Company
The Space Age Furniture Company manufactures tables and cabinets to hold microwave ovens and portable televisions. These products are made in various sizes and with various features, but all follow basically the same production and assembly operations. However, two of these products—the Saturn microwave stand and the Gemini TV stand—have a part (no. 3079) that requires machining on a special lathe used only for making that part. At present the machine is run by Ed Szewczak, a machinist who also operates other machines in Space Age's shop. Once set up and started, the lathe can run nearly unattended. However, the machinist must be present (even if not actually attending the machine) any time one of the machines, including the lathe, is in operation. At present, Ed works a regular 40-hour week. However, due to the workload for producing part 3079, it has been necessary to schedule frequent overtime for him in order to finish the necessary parts on time.
Coral Snodgrass, operations manager for Space Age, has just heard from Ed's foremen that Ed is becoming unhappy about so much overtime. As Coral knows, Ed has been with the company a long time and is an excellent, reliable employee. Skilled machinists with Ed's experience and employment record are extremely difficult to find. Coral wonders what can be done to alleviate this problem.
Recently, Space Age began using an MRP system that has helped reduce inventories greatly and improve on-time deliveries. In fact, Space Age carries no finished-goods inventory. Instead, everything in the master schedule is being produced for customer orders, so all products are shipped almost immediately. Previously Space Age had estimated that it cost $1.25 per week to store each Gemini and $1.50 per week to store each Saturn that wasn't shipped immediately. The master schedule for producing these two items for the next six weeks is shown below.
|
Master Schedule |
||||||
|
Week |
||||||
|
1 |
2 |
3 |
4 |
5 |
6 |
|
|
Gemini |
600 |
400 |
700 |
500 |
400 |
600 |
|
Saturn |
300 |
400 |
400 |
600 |
300 |
300 |
The part in question, 3079, is used in two different subassemblies: no. 435, which is used in the Gemini TV stand, and no. 257, which is used in the Saturn microwave stand. One of part 3079 is used in each subassembly, and one of each subassembly is used in each of the final products.
Part 3079 may be produced in any quantity since the lathe that makes it is not used for anything else. However, both of the subassemblies are produced using the same equipment. To minimize change over time, Space Age has decided that these subassemblies should be made in minimum quantities of 1,000 at a time, although there is no problem with capacity on the equipment that makes them. In fact, an order for 1,000 of subassembly 435 is due to be received in week 1, as is an order for 1,000 of subassembly 257. Lead time for both these subassemblies is one week, and no inventory is expected to be on hand for either part at the beginning of week 1. There is not any on-hand inventory of part 3079, and there are no orders in process.
Ed Szewczak earns $22 per hour and gets a 50% premium for any overtime work. Whenever part 3079 is made, there is no set-up time, but processing takes 0.03 hour per unit. It costs $0.25 per week to hold any of these parts over from one week to the next. The cost of holding each subassembly in inventory is $0.75 per unit per week.
Space
Age
Furniture
Company
The
Space
Age
Furniture
Company
manufactures
tables
and
cabinets
to
hold
microwave
ovens
and
portable
televisions.
These
products
are
made
in
various
sizes
and
with
various
features,
bu
t
all
follow
basically
the
same
production
and
assembly
operations.
However,
two
of
these
prod
ucts
—
the
Saturn
microw
ave
stand
and
the
Gemini
TV
stand
—
have
a
part
(no.
3079)
that
requires
machining
on
a
special
lathe
used
only
for
making
that
part.
At
present
the
machine
is
run
by
Ed
Szewczak,
a
machinist
who
also
operates
other
machines
i
n
Space
Age's
shop.
Once
set
up
and
started,
the
lathe
can
run
nearly
unattended.
However,
th
e
machinist
must
be
present
(even
if
not
actually
attending
the
machine)
any
time
one
of
the
m
achines,
including
the
lathe,
is
in
operation.
At
present,
Ed
works
a
regular
40
-
hour
week.
However,
due
to
the
workload
for
producing
part
3079,
it
has
been
necessary
to
sch
edule
frequent
overtime
for
him
in
order
to
finish
the
necessary
parts
on
time.
Coral
Snodgrass,
operations
manager
for
Space
Age,
has
just
heard
from
Ed's
foremen
that
Ed
is
becoming
unhappy
about
so
much
overtime.
As
Coral
knows,
Ed
has
been
with
the
company
a
l
ong
time
and
is
an
excellent,
reliable
employee.
Skilled
machinists
with
Ed's
experience
and
em
ployment
record
are
extremely
difficult
to
find.
Coral
wonders
what
can
be
done
to
alleviate
thi
s
problem.
Recently,
Space
Age
began
using
an
MRP
system
that
has
helped
reduce
inventories
greatly
and
improve
on
-
time
deliveries.
In
fact,
Space
Age
carries
no
finished
-
goods
inventory.
Instead,
everything
in
the
master
schedule
is
being
produced
for
customer
ord
ers,
so
all
products
are
shipped
almost
immediately.
Previously
Space
Age
had
estimated
that
it
cost
$1.25
per
week
to
store
each
Gemini
and
$1.50
per
week
to
store
each
Saturn
that
wasn't
s
hipped
immediately.
The
master
schedule
for
producing
these
two
items
for
the
next
six
weeks
is
shown
below.
Master
Schedule
Week
1
2
3
4
5
6
Gemini
600
400
700
500
400
600
Saturn
300
400
400
600
300
300
Space Age Furniture Company
The Space Age Furniture Company manufactures tables and cabinets to hold microwave ovens
and portable televisions. These products are made in various sizes and with various features, bu
t all follow basically the same production and assembly operations. However, two of these prod
ucts—the Saturn microwave stand and the Gemini TV stand—
have a part (no. 3079) that requires machining on a special lathe used only for making that part.
At present the machine is run by Ed Szewczak, a machinist who also operates other machines i
n Space Age's shop. Once set up and started, the lathe can run nearly unattended. However, th
e machinist must be present (even if not actually attending the machine) any time one of the m
achines, including the lathe, is in operation. At present, Ed works a regular 40-
hour week. However, due to the workload for producing part 3079, it has been necessary to sch
edule frequent overtime for him in order to finish the necessary parts on time.
Coral Snodgrass, operations manager for Space Age, has just heard from Ed's foremen that Ed is
becoming unhappy about so much overtime. As Coral knows, Ed has been with the company a l
ong time and is an excellent, reliable employee. Skilled machinists with Ed's experience and em
ployment record are extremely difficult to find. Coral wonders what can be done to alleviate thi
s problem.
Recently, Space Age began using an MRP system that has helped reduce inventories greatly and
improve on-time deliveries. In fact, Space Age carries no finished-
goods inventory. Instead, everything in the master schedule is being produced for customer ord
ers, so all products are shipped almost immediately. Previously Space Age had estimated that it
cost $1.25 per week to store each Gemini and $1.50 per week to store each Saturn that wasn't s
hipped immediately. The master schedule for producing these two items for the next six weeks
is shown below.
Master Schedule
Week
1 2 3 4 5 6
Gemini 600 400 700 500 400 600
Saturn 300 400 400 600 300 300
