What is the total annual inventory holding cost

Assignment Help Operation Management
Reference no: EM132224988

Question 1. Statistical Process Control

THE DATA IN THE FOLLOWING TABLES ARE AVAILABLE IN AN EXCEL SPREADSHEET (HW3-Quality Data.xlsx)

The Los Angeles Metro Rail Authority commissioned a study of travel time variation between two heavily used but adjacent subway stations (A and B) in the city. The following table shows observations in seconds of the time for travel between the two stations over a two-week period (each day 5 observations were collected).

 

Travel Time between Stations A and B (seconds)

Day

Trip 1

Trip 2

Trip 3

Trip 4

Trip 5

1

113.64

113.5

104.64

107.86

114.64

2

116.66

110.14

114.64

105.4

105.4

3

110.9

103.44

117.46

110

104.7

4

118.5

106.9

116.26

112.3

110.06

5

103.64

113.64

107.24

116.7

105.26

6

112.5

108.94

110.14

105.3

103.66

7

103.36

108.54

114.94

114.46

109.44

8

105.66

114.9

111.8

105.96

113.96

9

116.46

117.9

105.6

105

108.54

10

109.24

117.8

115.66

107.56

109.26

11

114.84

111.8

114

116.04

102.64

12

114.56

108.26

107.5

109.74

117.26

13

112.44

107.1

112

111.8

116

14

114.3

113.46

115.64

109.54

102.3

(a) Based on the above table, calculate the upper and lower control limits and the center-lines for the mean (X¯) and range (R) charts. Use the "factors" given in your slides (from Asynch Session 5).Control chart factors are also in the associated Excel data file.

(b) A few weeks after the limits and average case performance were established and agreed upon by the study team, the Authority commissions another round of observations (see below) to determine the process capability and control. Is the process governing travel times (between those two stations) in control? Why or why not?If the process is out of control, provide all reasons.

 

Travel Time between Stations A and B (seconds)

Day

Trip 1

Trip 2

Trip 3

Trip 4

Trip 5

1

115.02

104.55

119.98

118.96

117.76

2

108.84

108.56

117.86

118.9

110.02

3

121.38

106.6

106.74

117.92

118.08

4

120.74

117.18

112.78

107.62

121.1

5

120.98

116.1

119.76

107.06

112.88

6

121.68

118.52

114.96

121.86

108.92

7

115.24

117.9

117.08

106.12

119.2

8

115.34

116.58

114.48

118.72

107.06

9

121.46

118.34

115.24

109.36

108.1

10

106.32

107.16

107.38

119.46

113.8

11

106.4

116.84

109.18

111.36

116.18

12

117.62

116.32

112.26

112.32

120.76

13

118.66

118.66

106.4

115.44

106.22

14

125.18

118.48

114.28

114.04

100.19

(c) Suppose the scheduling team within LA Metro specifies that the minimum and maximum travel times between the stations be 106 and 116 seconds respectively, determine whether the process is capable based on the observations in part (b). Also, was the process performance capable to begin with in part (a)?

(d) If LA Metro wants to achieve a capable process for this segment (in terms of travel times between Stations A and B), what is their maximum allowable based on the data in part (b)?

Control Chart Factors

Sample Size

A2

D3

D4

d2

2

1.88

0

3.27

1.128

3

1.02

0

2.57

1.693

4

0.73

0

2.28

2.059

5

0.58

0

2.12

2.326

6

0.48

0

2

2.534

7

0.42

0.08

1.92

2.704

8

0.37

0.14

1.86

2.847

9

0.34

0.18

1.82

2.97

10

0.31

0.22

1.78

3.078

Question 2. TechZoom Semiconductor Manufacturing

TechZoom semiconductor company's basic manufacturing process involves building circuitry on a single silicon wafer one layer at a time. The same basic 5 steps (with variations dictated by the circuit design) are repeated for as many layers as needed, in this case 12 layers. Please see the process map below.

The five steps completedin each layer are:
a) Electrochemical Deposition, where coats of conductive materials are applied to the wafer substrate
b) Lithography, where circuit patterns are imaged onto the coated wafers
c) Etching, where the circuitry is embossed by dissolving the coat selectively
d) Doping, or Ion implantation, where different parts of the circuit are given special characteristics
e) Furnaces, where the doped regions of the circuits are activated for circuit function

A wafer has with slots for 500 chips or die each. When the 12-layer circuit is completed, the wafer is sliced to obtain the 500 die, which are then individually packaged in a die-packaging facility. However, after each layer is built, because of contaminants or other quality defects,an average 2% of the die are rejected or marked as unusable. So, at the end, when the wafer is sliced, we only obtain a fraction of the 500 die we started with, that can be packaged and shipped to customers.

There is a dedicated machine for each step, so each layer corresponds to a repeat visit by the wafer to that machine for that step. Since the wait times are not infinite (no matter how lengthy), you can assume less than 100% utilization at machines for each step. Demand for the company's chips is at the rate of 7500 good quality die/day. The factory operates 24 hours / day, 7 days / week.

(a) What is the total WIP (in wafers) in the factory? Also, report the average number of wafers in queue at each of the major steps?

(b) Each wafer is valued at $25,000, and the holding cost is 15% of the value of the wafer per year. What is the total annual inventory holding cost for the factory?

(c) Suppose with better information systems and scheduling systems, the wait times are reduced by 20% at each of the major steps (processing times remain unchanged). What is the savings in annual inventory holding cost for the factory?

Attachment:- homework.rar

Verified Expert

The process governing travel times (between those two stations) is not in control because of crossing upper limit. It needs focus on controlling the travelling time to achieve the process within the control limits. The maximum allowable Range of 25 allows all the processing time for travelling between the stations within the control limits.

Reference no: EM132224988

Questions Cloud

Situational leadership model : Explain Hersey et al. (1996) situational leadership model. Draw the model.
Organization labor relations and employee relations policies : Explain how an organization’s labor relations and employee relations policies and practices impact the organization’s total rewards programs.
Causal and a correlational relationship : What is the Different between a causal and a correlational relationship.
Draft an email to your vice president with the request : The budget has limited capacity this year. Draft an email to your vice president with the request.
What is the total annual inventory holding cost : What is the total WIP (in wafers) in the factory? Also, report the average number of wafers in queue at each of the major steps
Role of stakeholders in carrying out organizational duties : As a procurement professional you are required to explain the role of stakeholders in carrying out organizational duties?
Relationship between property rights-corruption : Discuss the relationship between property rights, corruption, and economic progress. How important are anticorruption efforts
Generation of the sustainable economic profit : What are the keys to competitive advantage and generation of the sustainable economic profit.
Description of the leader-the organisation-industry : Using relevant theories and models critically evaluate and analyse the leadership of a leader working in (business, government or not-for-profit) organisation

Reviews

len2224988

1/30/2019 11:11:58 PM

Please submit your assignment as an MS Word or PDF document with your last name, e.g. “MBA703 Assignment 3 –Smith_Jones_Baker.docx”. Please do not submit Excel spreadsheets. Please write out the parameter values and formulas you are using to calculate the answers. Please do not paste excel spreadsheet cells- they are often difficult to interpret, and even more difficult to investigate if your answers are incorrect. Assignment is due prior to class of week 6. Turn in one assignment per team.

Write a Review

Operation Management Questions & Answers

  Book review - the goal

Operations Management is about a book review. Title of the book is "Goal". This book has been written by Dr. Eliyahu Goldartt. The book has been appreciated by many as one of those books which offers an insight into the operations and strategic capac..

  Operational plan in hospitality enterprise

Operational plan pertaining to a hospitality enterprise is given in detail in the solution. The operational plan is an important plan or preparation which gives guidelines regarding the role and responsibilities of each and every operation at all lev..

  Managing operations and information

Recognise the importance of a strategic approach to the development and deployment of organisational information systems. Demonstrate an understanding of the importance of databases and their integration to the organisation's overall information mana..

  A make-or-buy analysis

An analysis of the holding costs, including the appropriate annual holding cost rate.

  Evolution and contributor of operations management

Briefly explain Evolution and contributor of Operations management.

  Functions and responsibilities of an operations manager

A number of drivers of change have transformed the roles, functions and responsibilities of an operations manager over recent years. These drivers have not only been based on technological innovations but also on the need for organisations to develop..

  Compute the optimal order quantity

Compute the Optimal Order quantity of DVD players. Determine the appropriate reorder point.

  Relationship to operations practice in the organisation

Evaluate problems in operations and identify approaches to overcoming them. Critically evaluate operating plans and identify areas for improvement. Justify, implement and evaluate changes to operations in line with modern approaches.

  A make or buy analysis

Develop a report for Figi Fabricating that will address the question of whether the company should continue to purchase the part from the supplier or begin to produce the part itself.

  Prepare a staffing plan

Prepare a staffing plan showing the change of your unit from medical/surgical staffing to oncology staffing.

  Leadership styles in different organizations

Ccompare the effectiveness of different leadership styles in different organizations

  Risk management tools and models

Be able to understand the concept of risk, roles and responsibilities for risk management and risk management tools and models.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd