What are economies of scale in a manufacturing plant

Assignment Help Operation Management

Reference no: EM131148015

Question 1: What is operations management? Why is it important? Is a good knowledge of operations management more important in service or manufacturing industries? Explain your answer.

Question 2: Discuss the use of PERT/CPM techniques for managing projects. Describe what PERT/CPM does. Discuss advantages and disadvantages of using it. What other techniques might you choose to manage your project?

Question 3: What are economies of scale in a manufacturing plant? Do they continue forever? What are diseconomies of scale? How might you decide the optimal size of a plant?

Question 4: What, in your opinion, are the three most important issues in supply chain management? Discuss why you think these are the key issues.

Question 5: Discuss why (or if) inventories are necessary. What are the benefits of inventories? What are the disadvantages of holding inventories?

Problem 1. Arsenal Electronics is going to construct a new $1.2 billion semiconductor plant and has selected four towns in the Midwest as potential sites. The important location factors and ratings for each town are as follows:

	Scores (0 to 100)
Location Factor	Weight	Abbeton	Bayside	Cane Creek	Dunnville
Work ethics	0.18	80	90	70	75
Quality of life	0.16	75	85	95	90
Labor laws/unionization	0.12	90	60	60	70
Infrastructure	0.10	60	50	60	70
Education	0.08	80	90	85	95
Labor skill and education	0.07	75	65	70	80
Cost of living	0.06	70	80	85	75
Taxes	0.05	65	70	55	60
Incentive package	0.05	90	95	70	80
Government regulations	0.03	40	50	65	55
Environmental regulations	0.03	65	60	70	80
Transportation	0.03	90	80	95	80
Space for expansion	0.02	90	95	90	90
Urban proximity	0.02	60	90	70	80

Recommend a site based on these location factors and ratings.

Problem 2. Sawyer Furniture is one of the few remaining domestic manufacturers of wood furniture. In the current competitive environment, cost containment is the key to its continued survival. Demand for furniture follows a seasonal demand pattern with increased sales in the summer and fall months, culminating with peak demand in November.

The cost of production is $16 per unit for regular production, $24 for overtime, and $33 for subcontracting. Hiring and firing costs are $500 per worker. Inventory holding costs are $20 per unit per month. There is no beginning inventory. Ten workers are currently employed. Each worker can produce 50 pieces of furniture per month. Overtime cannot exceed regular production. Given the following demand data, use Excel Solver to design an aggregate production plan for Sawyer Furniture that will meet demand at the lowest possible cost.

Input:			Beg. Wkrs		10			Regular		$16		Hiring		$500
			Units/wkr		50			Overtime		$24		Firing		$500
			Beg. Inv.		0			Subk		$33		Inventory		$20
	Month	Demand		Reg		OT	Subk		Inv		#Wkrs		#Hired		#Fired
	Jan	500		500		0	0		0		10		0		0
	Feb	500		500		0	0		0		10		0		0
	Mar	1000		1,000		0	0		0		20		10		0
	Apr	1200		1,000		200	0		0		20		0		0
	May	2000		1,000		1,000	0		0		20		0		0
	Jun	400		400		0	0		0		8		0		12
	Jul	400		400		0	0		0		8		0		0
	Aug	1000		1,000		0	0		0		20		12		0
	Sep	1000		1,000		0	0		0		20		0		0
	Oct	1500		1,500		0	0		0		30		10		0
	Nov	7000		3,500		3,500	0		0		70		40		0
	Dec	500		500		0	0		0		10		0		60
	Total	17,000		12,300		4,700	0		0		246		72		72

Problem 3. Complete the following MRP matrix for Item X. Determine when orders should be released and the size of those orders.

Item: X	LLC: 0	Period
Lot Size: Min 50	LT: 2	1	2	3	4	5	6	7	8
Gross Requirements		25	30	56	25	100	40	30	20
Scheduled Receipts			50
Projected on Hand	30
Net Requirements
Planned Order Receipts
Planned Order Releases

Release orders in periods 1 through 5 for quantities of 50, 50, 56, 50, and 50 respectively.

Problem 4. Fibrous Incorporated makes products from rough tree fibers. Its product line consists of five items processed through one of five machines. The machines are not identical, and some products are better suited to some machines. Given the following production time in minutes per unit, determine an optimal assignment of product to machine:

	Machine
Product	A	B	C	D	E
1	17	10	15	16	20
2	12	9	16	9	14
3	11	16	14	15	12
4	14	10	10	18	17
5	13	12	9	15	11

Problem 5. The following probabilistic activity time estimates are for a CPM/PERT network.

	Time Estimates (days)				Time Estimates (days)
Activity	a	m	b	Activity	a	m	b
1	1	2	6	7	1	1.5	2
2	1	3	5	8	1	3	5
3	3	5	10	9	1	1	5
4	3	6	14	10	2	4	9
5	2	4	9	11	1	2	3
6	2	3	7	12	1	1	1

Determine the following:

a. Expected activity times
b. Earliest start and finish times
c. Latest start and finish times
d. Activity Slack
e. Critical Path

Expected Project duration and standard deviation.

Reference no: EM131148015

Questions Cloud

Identify economic, legal, and regulatory forces and trends : Identify economic, legal, and regulatory forces and trends. Critique how well the organization adapts to change

Program to design an appointment calendar : Write a program to design an appointment calendar. An appointment includes the date, starting time, ending time, and a description;

Estimate the short-run total cost using the data below : Using equation 3, a theoretical regression equation of the short-run total cost, estimate the short-run total cost using the data below. Then write the estimated cost equation. Indicate the value of the total fixed cost and of the marginal cost fr..

How many shares were used to calculate eps : How many shares were used to calculate E.P.S.? What is the amount of Net Earnings? List 3 examples of selling and administrative expenses. What is the amount of Gross Margin?

What are economies of scale in a manufacturing plant : What are economies of scale in a manufacturing plant? Do they continue forever? What are diseconomies of scale? How might you decide the optimal size of a plant?

Construct an sql schema definition for database : Construct an SQL schema definition for this database. Use inheritance where appropriate.

Explain project management as a discipline : Explain project management as a discipline. Describe the industries in which project managers are in high demand. Provide evidence to support your response

The dynamic programming algorithm : How many different optimal subsets does the instance of part (a) have - how can we use the table generated by the dynamic programming algorithm to tell whether there is more than one optimal subset for the knapsack problem's instance?

What does generation x contribute to the workplace : Explain how you would prepare for this workforce transition. How would you ensure that your organization does not experience a leadership gap with the retirement of its seasoned leaders?

User Account

All Pages