Clain Industries wants to introduce a new and improved Green Chile Processor, th
ID: 435138 • Letter: C
Question
Clain Industries wants to introduce a new and improved Green Chile Processor, the Clain GCP 4000, to replace the popular GCP 3000. Due to demand projections, the GCP 3000 will be out of stock on 1 January 2019 and will be immediately replaced by the GCP 4000. Clain industries sells the GCP 3000 worldwide with most sales in the Northern Hemisphere. The CEO assumes that GCP 3000 sales over the previous 24 months to be the best forecasting tool for GCP 4000 sales in the ?rst 12 months following introduction. Monthly sales for the past 24 months are as follows:
The GCP 4000 is similar to the GCP 3000 but requires completely new components. Components A, B, and C are assembled in house, but D, E, and F are sourced from vendors with the following shipment times:
The GCP 4000 is produced with the following steps:
Additional Information:
• A backorder costs Clain Industries $10 per item.
• Storing an item at the warehouse costs $2 per item per month.
• Based on training and severance, there is a one-time $2000 cost for hiring a worker and a $3000 for ?ring a worker due to production.
1. Based on the last 24 months of sales with the GCP 3000, what general hypotheses can you make about demand?
2. What methods would you use to forecast the next 12 months based on previous data? Why?
3. Based on these costs, what can you assume? You can arbitrarily set the worker count on 1 January based on your production line estimation from the previous month.
4. The GCP 3000 and 4000 are high end machines retailing between $8000 and $10000 based on the market. What does that tell you?
5. Given the product structure, what is your ordering strategy for vendor-procured items for 2019? ?
6. Using line balancing, how you recommend structuring work? How many assembly lines are needed based on a 36-hour workweek and 4 week month.
7. How do you recommend switching production from the GCP 3000 to the GCP 4000??
2017 2018 10167 9614 January February 10279 10325 March April May June July August September 19697 20016 October 19882 19665 November 9993 10066 December 9986 9949 10106 10107 9896 9596 9807 9596 10182 9896 24819 25348 25141 25050Explanation / Answer
Ordering strategy for vendor procured items for 2019:
The aim of the ordering strategy is as below
because of parts.
• Lowest conceivable capacity and holding cost.
• Keep security stock to deal with the uncontrolled varieties in the requesting and store network process and guarantee that creation isn't influenced due to non-accessibility of parts.
• Lowest requesting cost for the association.
• Lowest production network cost for the association
The ordering strategy for the vendor procured items for 2019 will be as such
• The requesting technique will be produced for the merchant obtained parts, for example, D, E and F parts.
• The requesting technique will be founded on the lead time of the parts i.e. D-two weeks, E-multi week and F-multi week.
• Ordering technique will be founded on the month to month volume utilization of parts or according to guage request.
• Ordering methodology will be founded on ideal requesting amount idea which guarantees the least cost of request administration, most minimal stock administration cost, most minimal holding cost and least store network cost.
• Ordering system will guarantee that there is no stock amassing and won't have antagonistic effect on the material cost for the association.