MEC_AMO_TEM_035_02 Page 1 of 16 Operations Management (BUSS-81006) – Summet – 2021-CW (23-02 2) Task 2 (90 Marks) Part A (40 Marks) Given the following product tree (the quantities are shown between brackets in the next page: X A (1) B (2) C(3) C (1) The following data for X. A, B and C is as follows: X ? Stock 50 330 270 2000 Safety Stock 10 30 20 250 Lot Size 1 50 50 100 Lead Time 1 3 3 3 B ? The master production schedule calls for production of 40 X in period 1. 300 in period 5,600 in period 6, 100 in period 7. There is a scheduled receipt of 1500 of Cin week 3. 1. Calculate the MRP-explosion and write the steps of calculation 2. Discuss the limitations of MRP system. (20 Marks) 20 Marks) Yost-Perry Industries (VPI) produces a mix of affordable guitars (A, 8. These guitars are made at four different processing stations (W X Y Z The information about the products (selling price, weekly demand, costs of raw materials and parts and production times and the process sequence along the machining sites are listed below figure shown Product A 511 Step 1 at work S for 2 12 Product Sipt a wow S2 atworten Pout Demant Products 514 Sot at workstation X She www Gom Post Por $11 Damit ? www The raw materials and purchasing parts are represented by the inverted triangles. YPI can sell all made guitars up to and including the weekly demand and does not have to pay fine if these quantities are not met Each workstation is staffed by a specialized employee who only work alone and is paid S 15 per hour. YPI operates 8 production hours per day during a 5 day working weet with no overtime Overhead costs are $9000 per week 1. Which workstation has the highest aggregate workload (and acts as a bottleneck) when they want to meet total demand for the next week? Based on the results in (1), we have to choose our production schedule carefully Currently, production decisions are made using the traditional method, which is to accept as much products of the highest contribution margin = sales price – cost of raw materials & MEC_AMO TEM 035_02 Page 3 of 16 Operations Management (BUSS 3 1006) – Summer – 2021-cw (2) – OP purchased parts) up to the limit of its demand, followed by the next highest contribution margin and so on until we meet a capacity limit. 2. Calculate the resulting production plan for next month using this method together with the overall costs and profits. Part (C): (10 Marks) Discuss a real case study for a company that adopted lean practices. Discuss the benefits of lean for the company.

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