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Read Space Age Furniture Company in Chapter 9 of your text. Respond to the following and include any Materials Requirement Planning (MRP) calculations:
The final case study should demonstrate your understanding of the reading as well as the implications of new knowledge. The paper should integrate readings scholarly sources and class discussions into work and life experiences. It may include explanation and examples from previous events as well as implications for future applications.
The purpose of the final case study is for you to culminate the learning achieved in the course by describing your understanding and application of knowledge in the field of operations management.
Writing the Final Paper The Final Paper:
Carefully review the Grading Rubric for the criteria that will be used to evaluate your assignment.
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 but all follow basically the same production and assembly operations. However two of these productsthe Saturn microwave stand and the Gemini TV standhave 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.
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 1000 at a time although there is no problem with capacity on the equipment that makes them. In fact an order for 1000 of subassembly 435 is due to be received in week 1 as is an order for 1000 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.