Paragraph 14 Styles Objective: This activity has the purpose of helping students to analyze the production, operating, and marketing factors of Gizmo Inc. Case Study: Ingenious Contrivances Gizmo, Inc produced a myriad of metal and plastic kitchen utensils. Its product line is in continuous flux, because the company is constantly adding new gadgets to its already overwhelming number of items. Gizmo takes great pride in its ability to create a kitchen item for every conceivable need. Success has come from a continuous offering of "never heard of before" but "can't live without contrivances. Hence, heavy emphasis is placed on product innovation and market leadership. Gizmo is undergoing development of a vegetable steamer for microwave ovens. The steamer can be inserted in almost any size cooking container. It can expand to the size of the cooking appliance and collapse for storage Since Gizmo has a wide array of products, it is important that the items be produced on a regular cycle. Given the short product life of many items, as well as small annual sales of others, Gizmo avoids purchasing equipment that would be dedicated to a specific product. Fortunately, the engineering and production managers have determined that the steamer is producible on existing equipment, since it is simply a modification of a straining utensil that has been in production for several years. The critical decision is the scheduling of production for the steamer. A determination must be made for the size and the frequency of the production run. Various Gizmo departments have been consulted. Marketing is excited about the prospects for the steamer and expects sales during the first year to be 50,000 units. Production has issued the following estimates: $200 setup cost, $5 per unit production cost, and 1000 units per day production capability for the 250-day operating year. Inventory control estimates an annual holding cost of $0.80 per unit. Applying the concept of scheduling in economic quantities, a production run of 5590 units approximately 9 times a year is deemed appropriate. Mr. Kaiser, the general manager, has reservations. He has just finished reviewing a product proposal for an item that would compete for machining time with the steamer and the strainer. He is also having difficulty ascertaining his actual production capability and questions the validity of the capacity figures. He wonders if basic operating principles are being overlooked. (Ctrl) I Paragraph 12 Styles Objective: This activity has the purpose of helping students to analyze the production, operating, and marketing factors of Gizmo Inc. Case Study: Ingenious Contrivances Gizmo, Inc produced a myriad of metal and plastic kitchen utensils. Its product line is in continuous flux, because the company is constantly adding new gadgets to its already overwhelming number of items. Gizmo takes great pride in its ability to create a kitchen item for every conceivable need. Success has come from a continuous offering of "never heard of before" but "can't live without contrivances. Hence, heavy emphasis is placed on product innovation and market leadership. Gizmo is undergoing development of a vegetable steamer for microwave ovens. The steamer can be inserted in almost any size cooking container. It can expand to the size of the cooking appliance and collapse for storage. Since Gizmo has a wide array of products, it is important that the items be produced on a regular cycle. Given the short product life of many items, as well as small annual sales of others, Gizmo avoids purchasing equipment that would be dedicated to a specific product. Fortunately, the engineering and production managers have determined that the steamer is producible on existing equipment, since it is simply a modification of a straining utensil that has been in production for several years. The critical decision is the scheduling of production for the steamer. A determination must be made for the size and the frequency of the production run. Various Gizmo departments have been consulted. Marketing is excited about the prospects for the steamer and expects sales during the first year to be 50,000 units. Production has issued the following estimates: $200 setup cost, $5 per unit production cost, and 1000 units per day production capability for the 250-day operating year. Inventory control estimates an annual holding cost of $0.80 per unit. Applying the concept of scheduling in economic quantities, a production run of 5590 units approximately 9 times a year is deemed appropriate. Mr. Kaiser, the general manager, has reservations. He has just finished reviewing a product proposal for an item that would compete for machining time with the steamer and the strainer. He is also having difficulty ascertaining his actual production capability and questions the validity of the capacity figures. He wonders if basic operating principles are being overlooked. (Ctrl) I Read the Case study: Ingenious Contrivances, in order to answer the questions. After your reading, choose one(1) question to answer and submit the question in Blackboard. 1 Should Gizmo adopt the initial figures as its production plan? 2. Has any necessary information been overlooked? Should the theoretical model be modified? 3. What production, operating, and marketing factors could alter or influence this decision? .