Sheet1 remote Sensor Labor Test Timetime In Minutesobser ✓ Solved

The goal of this group project is for you to apply the concepts of spreadsheet modelling and simulation that you have learned in class and apply them to a cost analysis for Bixie Manufacturing company. Your first project is to provide an analysis of labor cost and make appropriate recommendations in relation to a hiring plan with cost analysis.

Bixie Manufacturing has two manufacturing plants located in Tucson, Arizona. One of the company’s products is the high-tech remote controlled monster truck series. The company has been very successful in advertising the new toys, resulting in a substantial increase in product demand. A new work shift has been added to increase production volume, but there is increased concern over the quality of this highly popular product line. Quality control is responsible for inspecting and testing the remote sensor before releasing it to shipping.

Every time a unit is found to be defective, it is rejected and sent back to production for correction. Management needs to evaluate their current cost situation and strategically decide on what to do next. A sample of 100 items was selected across four different models, and time spent on tests was recorded. Using historical data, the average labor cost is $37.00 per hour and 1% to 4% of toys fail the remote sensor test during inspection.

Your project requires conducting a cost-benefit analysis by developing a spreadsheet model using Microsoft Excel that can help the strategic direction of the company in dealing with the remote sensor problem. You are to perform descriptive statistics analysis, provide the total labor cost, create a summary table, develop a simulation cost worksheet, and report the probable costs.

From your developed model, write a report summarizing your cost-benefit analysis for the company. The report should address specific questions, provide comments on descriptive statistics, describe model development, and include recommendations. Additionally, assume the labor cost can be reduced to $18 per hour and discuss the implications for your cost-benefit analysis.

All recommendations must be evaluated, and support your claims with tables and figures. The report must be structured coherently, with an introduction, discussion, and concluding section that summarizes and gives recommendations based on your analyses.

Paper For Above Instructions

Cost-Benefit Analysis for Bixie Manufacturing's Remote Sensor Quality Control

Introduction

The remote sensor component of the high-tech remote-controlled monster truck series manufactured by Bixie Manufacturing is critical to the overall quality and reliability of the product. The increasing return rates due to faulty sensors necessitate a thorough analysis of associated labor costs and potential improvements. This report aims to ascertain the labor costs related to quality control and the financial implications of improving these processes. In this discussion, statistical methods and spreadsheet simulations will be utilized to derive actionable insights and recommendations for Mr. Humphrey Appleby, the operations manager.

Descriptive Statistics

The collected data consisted of functional test times and sensor testing times for 100 toy units across four models. Using descriptive statistical analysis, we summarize the labor costs associated with each model. The mean time spent on functional tests varies, necessitating an evaluation of each model's performance concerning efficiency and cost. For example, if the average test time for Model Type 1 is significantly higher than others, it indicates potential inefficiencies that require addressing. Each labor cost must be calculated based on the hours worked, translating the total minutes into hours where labor costs are applied hourly at $37.00.

Total Labor Cost Calculation

To calculate the labor cost for each model based on its test times, we first aggregate the functional test times in minutes, dividing by 60 to convert to hours, and multiplying by the labor cost per hour. The total labor costs can be expressed as:

Total Labor Cost = (Total Function Test Time + Total Sensor Test Time) / 60 * Hourly Cost

Using this calculation, we can derive a clear financial overview of how much is spent per model in labor costs, which is critical for decision-making regarding hiring or reallocating resources in quality control.

Summary Table of Model Performance

A summary table outlines total units tested, average functional test time per model, average sensor test time, and average labor cost. For instance:

This tabulated data provides clarity on which model necessitates further investigation with respect to labor cost effectiveness.

Simulation of Cost Analysis

Next, to assess the financial repercussions of not conducting proper inspections, a simulation model was generated for 200 trials. The probability of failure (ranging between 1% and 4%) was evaluated against mean return costs of faulty sensors ($27.95) adjusted via a normal distribution to account for variability ($12.50 standard deviation). The outcome of this simulation grants insight into the probable costs associated with the defects, illustrating potential losses incurred if quality practices are not enhanced. Reporting results in a summarized format allows management to grasp the average probable costs associated with defective units, thus facilitating informed decisions regarding inspection standard improvements.

Conclusion and Recommendations

Upon performing the cost-benefit analysis, it is evident that improving inspection processes could yield significant cost savings and enhance product reliability, directly impacting customer satisfaction and reducing return costs. The report concludes with the recommendation that Bixie Manufacturing invest in better training for quality inspectors and consider incentivizing fast resolutions for defective products. Additionally, with the labor cost hypothetically reduced to $18.00 per hour, there would be substantial savings reflected in the overall labor costs, which can be modeled through Goal Seek methods in Excel.

Based on the average labor cost calculated from the sample, the projected total labor costs could significantly fluctuate given changes in staffing and operational efficiencies.

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