MGT-510 Operations Management
This project is designed to demonstrate that many of the concepts we have been studying are tied
together in a single enterprise. For this exercise you are the operations manager for the local Acme
Tricycle Company and will need to put together the plan for 2012.
The following information is applicable to all problems.
The indented BOM for a tricycle is presented below:
A Completed Tricycle
C(2) Rear Wheel Assembly
D(1) Rear Wheel
E(1) Rear Tire
F(1) Axle Assembly
G(1) Front Wheel Assembly
H(1) Front Wheel
I(1) Front Tire
J(1) Handle Bar Assembly
K(1) Handle Bar
M(2) Hand Grips
N(1) Seat Assembly
You have the following parts inventory on hand at the beginning of 2012:
A B C D E F G H I J K L M N O P
200 500 250 650 400 450 750 420 375 210 575 600 2500 850 1050 850
Demand for 2011 was:
Month Demand Month Demand
January 1200 July 2300
February 1300 August 1900
March 1000 September 2400
April 1400 October 2700
May 2000 November 3300
June 1700 December 3300
Production time is 0.5 hours per unit (2 units/hr) Assume 20 Workdays per month
Average Labor Cost is $10/hour Shortage Cost is $20 per unit
Overtime Cost is $15/hour Inventory Cost is $5 per unit
Workweek is 5 days, 8 hours per day Hiring Cost is $100, Layoff Cost is $200Due to your contract with the union, you can only hire new workers at the beginning of Quarter 3.
Layoffs can only occur at the end of Quarter 2. Overtime is authorized only in Quarters 2 and 4. You
currently have 10 assembly workers on staff.
Quarter 1 = Jan, Feb, Mar
Quarter 2 = Apr, May, Jun
Quarter 3 = Jul, Aug, Sept
Quarter 4 = Oct, Nov, Dec
The following ordering information is available for Rear Tires:
Cost per order is $12
Annual Holding Cost is $0.50 per unit
Assume 240 work days per year that tires are required
Lead Time – 10 days
Given the information above:
1. Using Least Squares Regression, calculate the demand forecast for each month of 2012 (round each
forecast up to the nearest whole number for ease of calculations).
2. Using your forecast, calculate the quarterly production plan for 2012.
3. Draw the Product Structure Tree for the tricycles.
4. Determine for the month of January 2012 what your net requirements for all BOM components are.
5. Using the actual tricycle demand for 2011 and the Q-Model, calculate the Optimal (Economic) Order
Quantity and Reorder Point for Rear Tires.
6. Design and Diagram a process for assembling the tricycles.
Paper#46190 | Written in 02-Feb-2016Price : $18