Bottlenecks govern throughput and inventory in system

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Reference no: EM13109581

Question 1

Vance Armstrong is making his monthly order (every 30 days) for a supply of racing tires for the Sunshine Bicycle Shop. The order will take two days to arrive. Vance sells tires at an average rate of five per day (six days per week) with a standard deviation of demand of one per day. He desires to have stock of racing tires at a 98 percent service probability to satisfy his customers. He currently has 35 racing tires in inventory. How many should be ordered? From standard normal distribution table, z = 2.05

Question 2

Jill's Job Shop buys Widgets for use in its production system. Each year the company uses about 10,000 Widgets that cost $10 each. The parts are needed 52 weeks/year at a constant rate. Widgets are ordered whenever remaining quantity drops to the reorder level. Holding costs amount to 20% of item cost. Every time an order is placed for more Widgets, ordering cost is $150. Lead-time to receive an order is 4 weeks. Safety stock is set at 55 units. What are the reorder quantity and the reorder point?

A particular raw material is available to a company at three different prices, depending on the size of the order:

Quantity range	Cost (C)	EOQ	Feasible
_•Less than 100 pounds	$20 per pound
100 to 999 pounds	$19 per pound
1,000 or more pounds	$18 per pound

The cost to place an order is $40. Annual demand is 3,000 units. Holding (or carrying) cost is 25% of the material price. What is the economic order quantity to buy each time?

Format for Answer: The best order size is______________ units at a cost of $_____ per pound_

Question 3

Question text

Historical demand for a product is as follows:

Demand
April	60
May	50
June	55
July	75
August	SO
September	75

(a.) Using a simple four-month moving average, calculate a forecast for October_

(b.) Using single exponential smoothing with alpha= 0.3 and a September forecast =70, calculate a forecast for October.

(c.) Using simple linear regression, calculate the trend line (Y_t) for the historical data The X-axis scale is: April = 1, May = 2, and so forth. Y-axis is Demand from above.

Y_t = a + bx

(d) Using the linear regression model above, what is a forecast for October?

Question 4

From the reading Decoding the DNA of the Toyota Production System, what are the components of the "DNA" that underpin TPS (and subsequently MT and Lean)?

Question 5

Choose one of the rules of constraint/bottleneck management listed below (as demonstrated in the storyline of The Goal) and briefly discuss the concept as related to the diagram of the layout of a dentist's office shown on the diagram here.

A) Do not balance capacity, balance the flow.

B) An hour lost at a bottleneck is an hour lost for the entire system.

C) Bottlenecks govern throughput and inventory in the system.

Reference no: EM13109581

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