Deepit Inc is a manufacturer of specialty internet communications equipment. The company competes in the global internet communications equipment market. Equipment is regulated by standards bodies to ensure security, reliability and safety. Expected serviceable product lifetime is 10 years. DeepIt's competitive advantages include their leading edge platforms, (including custom hardware and software), product configurability and fast delivery time. Customer deliveries are expected to ship within 5 days of receipt of the final customer order. The company is currently developing the 2021 business plan. As the Production Management team, you have been asked to prepare the production plan for 2021. You have been provided with the actual unit sales history for the past 9 months and the forecast unit sales for the coming quarter. The Sales and Marketing teams have also provided a projection of unit sales for 2021. Deeplt uses a network of sub-contract manufacturers to produce the majority of components and sub-assemblies required to build each unit. However, due to complexity in testing and regulatory test reporting, final assembly and test is performed in-house. Each unit is custom configured as per the customer order. Configuration options include the number of hard drives, the number of optical modules and the software image (installed software bundle). The base unit has 36 hard drive slots and 128 optical ports. Each slot and port must be fully tested with a hard drive or optical modules regardless of whether it is populated in the final customer configuration. Typically less than 50% of units sold are configured with all ports and hard drives installed. Each step in the assembly and test processes requires a technologist to perform the operation, with the exception of the stress test process. The stress test process is run in specialized stress test chambers. The test runs automatically for 50 hours. The technologist is only required to load and unload the units from the chambers before and after testing (25 min total). The process steps and times are listed below. The motherboard final configuration and test must be completed prior to the Bottom-side assembly step. The Power supply interface board assembly and test must be completed prior to the Top-side assembly step. All other steps are performed in sequence. Motherboard final configuration Motherboard post-configuration test Labour Equipment Major Time (min) Time (min) Capital Equipment 50 50 20 20 Board Tester 35 35 Power supply assembly Power supply test 20 20 Power Supply Tester Interface board assembly Interface board test 45 10 45 10 Board Tester 110 110 Bottom Side assembly Bottom Side Continuity Test 20 20 Continuity Tester 120 120 Top Side assembly Top Side Continuity Test 20 20 Continuity Tester 20 20 Generic Configuration Assembly Generic Imaging 30 30 Final Continuity Test 20 20 Imaging System Continuity Tester Stress Chambers System Stress Test 25 3000 30 30 Customer Configuration Customer Imaging 60 60 Imaging System Final Tester Final Test 30 30 20 20 Outgoing QA Packaging 15 15 Deeplt currently works 245 days per year and is operating with 1 shift in production. The shift runs 8 hours/day. There are two paid 10 min breaks and a paid 30 min lunch break each day. Labour costs (including benefits) is $28/hour. Overtime is paid after 40 hours in a week at 1.5 times the base rate. The 2020 unit sales and forecast is shown below. Sales and Marketing is predicting an 9% increase in unit sales and at this point is expecting this to be uniformly spread over each month in 2021 (9% increase Jan from prior Jan etc). The Executive team has mandated a 20% capacity cushion to ensure the Company's ability to rapidly respond to unplanned peaks in customer demand. Q1 Q2 03 Feb Jul Jan 115 Mar 695 Apr 150 May 215 Jun 785 Aug 220 Sep 860 Q4 (forecast) Oct Nov 187 254 Dec 905 2020 180 170 1) Determine the 2021 forecast demand. Discuss this demand pattern and suggest explanations for this. Discuss issues and risks that may occur in production as a result of this forecast and provide recommendations for managing these. Recommend what type of production inventory policy/strategy should be used. 2) The following is a list of the major capital equipment used in the production line. Determine the number of each type of equipment that is required to meet the 2021 forecast demand. Note that the traffic stress testers can run without technologists being present (except to load and unload). Note: the stress test process has the highest overall capital costs. These units typically cost $60,000 each. The motherboard and interface testing are both run on the PCBA tester. Generic and customer imaging are both done on the imaging system. PCBA Testers Power Supply Testers Continuity Testers Imaging systems Stress test chambers Final Testers 3) Imaging systems cost $85,000 per unit. They have an expected life of 4 years. Recommend the number of units to purchase. Compare costs with and without overtime and discuss whether it is lower cost to chase the demand throughout the year (reactive strategy) or to use an expansionist strategy and buy units ahead of demand. 4) Draw a process flow diagram and recommend a production layout (hint, consider the impact of the stress test process, the final configuration and test process and the production inventory strategy). Create a precedence network diagram and determine the number of required work stations to meet the 2021 demand forecast. Determine the planned cycle time and planned idle time for the line. Recommend where inventory should be held and provide your reasoning. (hint. Include recommendations for hard drives and optical ports and work-in-process). Deepit Inc is a manufacturer of specialty internet communications equipment. The company competes in the global internet communications equipment market. Equipment is regulated by standards bodies to ensure security, reliability and safety. Expected serviceable product lifetime is 10 years. DeepIt's competitive advantages include their leading edge platforms, (including custom hardware and software), product configurability and fast delivery time. Customer deliveries are expected to ship within 5 days of receipt of the final customer order. The company is currently developing the 2021 business plan. As the Production Management team, you have been asked to prepare the production plan for 2021. You have been provided with the actual unit sales history for the past 9 months and the forecast unit sales for the coming quarter. The Sales and Marketing teams have also provided a projection of unit sales for 2021. Deeplt uses a network of sub-contract manufacturers to produce the majority of components and sub-assemblies required to build each unit. However, due to complexity in testing and regulatory test reporting, final assembly and test is performed in-house. Each unit is custom configured as per the customer order. Configuration options include the number of hard drives, the number of optical modules and the software image (installed software bundle). The base unit has 36 hard drive slots and 128 optical ports. Each slot and port must be fully tested with a hard drive or optical modules regardless of whether it is populated in the final customer configuration. Typically less than 50% of units sold are configured with all ports and hard drives installed. Each step in the assembly and test processes requires a technologist to perform the operation, with the exception of the stress test process. The stress test process is run in specialized stress test chambers. The test runs automatically for 50 hours. The technologist is only required to load and unload the units from the chambers before and after testing (25 min total). The process steps and times are listed below. The motherboard final configuration and test must be completed prior to the Bottom-side assembly step. The Power supply interface board assembly and test must be completed prior to the Top-side assembly step. All other steps are performed in sequence. Motherboard final configuration Motherboard post-configuration test Labour Equipment Major Time (min) Time (min) Capital Equipment 50 50 20 20 Board Tester 35 35 Power supply assembly Power supply test 20 20 Power Supply Tester Interface board assembly Interface board test 45 10 45 10 Board Tester 110 110 Bottom Side assembly Bottom Side Continuity Test 20 20 Continuity Tester 120 120 Top Side assembly Top Side Continuity Test 20 20 Continuity Tester 20 20 Generic Configuration Assembly Generic Imaging 30 30 Final Continuity Test 20 20 Imaging System Continuity Tester Stress Chambers System Stress Test 25 3000 30 30 Customer Configuration Customer Imaging 60 60 Imaging System Final Tester Final Test 30 30 20 20 Outgoing QA Packaging 15 15 Deeplt currently works 245 days per year and is operating with 1 shift in production. The shift runs 8 hours/day. There are two paid 10 min breaks and a paid 30 min lunch break each day. Labour costs (including benefits) is $28/hour. Overtime is paid after 40 hours in a week at 1.5 times the base rate. The 2020 unit sales and forecast is shown below. Sales and Marketing is predicting an 9% increase in unit sales and at this point is expecting this to be uniformly spread over each month in 2021 (9% increase Jan from prior Jan etc). The Executive team has mandated a 20% capacity cushion to ensure the Company's ability to rapidly respond to unplanned peaks in customer demand. Q1 Q2 03 Feb Jul Jan 115 Mar 695 Apr 150 May 215 Jun 785 Aug 220 Sep 860 Q4 (forecast) Oct Nov 187 254 Dec 905 2020 180 170 1) Determine the 2021 forecast demand. Discuss this demand pattern and suggest explanations for this. Discuss issues and risks that may occur in production as a result of this forecast and provide recommendations for managing these. Recommend what type of production inventory policy/strategy should be used. 2) The following is a list of the major capital equipment used in the production line. Determine the number of each type of equipment that is required to meet the 2021 forecast demand. Note that the traffic stress testers can run without technologists being present (except to load and unload). Note: the stress test process has the highest overall capital costs. These units typically cost $60,000 each. The motherboard and interface testing are both run on the PCBA tester. Generic and customer imaging are both done on the imaging system. PCBA Testers Power Supply Testers Continuity Testers Imaging systems Stress test chambers Final Testers 3) Imaging systems cost $85,000 per unit. They have an expected life of 4 years. Recommend the number of units to purchase. Compare costs with and without overtime and discuss whether it is lower cost to chase the demand throughout the year (reactive strategy) or to use an expansionist strategy and buy units ahead of demand. 4) Draw a process flow diagram and recommend a production layout (hint, consider the impact of the stress test process, the final configuration and test process and the production inventory strategy). Create a precedence network diagram and determine the number of required work stations to meet the 2021 demand forecast. Determine the planned cycle time and planned idle time for the line. Recommend where inventory should be held and provide your reasoning. (hint. Include recommendations for hard drives and optical ports and work-in-process)