1) Walmart Division of Quebec proceeded with a call for tender to buy a total qty of 1,100 bicycles for the Summer-Fall 2020

By using the results from the MID TERM EXAM where you already determined the optimized Manufactured time (see line 19)

the 3 companies (Bianchi, KONA and FUJI) are still assessing the way to go in order to compete HERO. Unfortunatelly, because of the disruptions generated by the COVID-19 outbreak KONA Canada decided to step out , fact that automatically put more pressure on the 2 remaining companies (Bianchi and respectively Fuji) to merge their efforts and BID on this Call for tender.

With the Minimum Cumulated volume required still being 1,100 units to compete HERO , please calculate :

1a) What will be the optimum production split (percentage of BIANCHI Bicycles vs percentage of FUJI bicycles) that will provide a production lead time supply better than what HERO by itself could ever propose

1b) By acknowledging that HERO Costing is very low, what will be the AVERAGED COST BIANCHI & FUJI could come up with, in order to compete (please consider the impact of the interoperational and the daily storage costs as well)

OPTIMIZED MANUFACTURING TIME

Brand BIANCHI (Italy) FUJI (JAPAN) HERO India

Item/ Machinery

Manufacturing Time (in Minutes/kit)

Manufacturing Time (in Minutes/kit)

Manufacturing Time (in Minutes/kit)

Drive train :Shaft and Gears / Multi-tool - M1 - Job 1 ii (27) 18 15

Frame Kit with Saddle and Pedals/Multi-tool M1 - Job 2

jj (33) 12 9

Wheels / Multi -tool -M2 - Job 3 kk (76) 9 7

Assembling & QUALITY CONTROL Bench (M3)- Job 4 14 12 10

total time /kit 14 51 41

Number of Units 1100 1100 1100

Required time to meet the volume (minutes) 15400 56100 45100

Optimizided Manufacturing time (MINUTES/ ASSEMBLED BICYCLE)

? 42 34

OPTIMIZED COSTING INCLUDING THE STORAGE COST

please minimize the overall costing per brand so the compounded costs (Manufacturing and interoperational storage) will compete HERO

BIANCHI FUJI HERO

Manufacturing costs - M1 ($/ hour) $ 22,00 $ 16,00 $ 16,00

Interoperational Storage costs - M1 ($/Minute) $ 0,95 $ 1,90 $ 0,80

Manufacturing costs -M1 ($/ hour) $ 20,00 $ 10,00 $ 12,00

Interoperational Storage costs - M1 ($/Minute) $ 0,90 $ 1,00 $ 0,75

Manufacturing costs - M2 ($/ hour) $ 11,00 $ 8,25 $ 9,00

Interoperational Storage costs - M2 ($/Minute) $ 1,00 $ 1,00 $ 1,10

Manufacturing costs -M3 ($/ hour) $ 19,00 $ 18,00 $ 11,00

Interoperational Storage costs - M3 ($/Minute) $ 0,50 $ 0,50 $ 0,39

FINISHED PRODUCT Storage cost / unit/day $ 0,28 $ 0,45 $ 0,55