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Estimate the value of your improvement project given the following inputs; labor cost: $100000 per year burdened rate, $60000/year unburdened. 250 workdays per year, three

  1. Estimate the value of your improvement project given the following inputs;
    • labor cost: $100000 per year burdened rate, $60000/year unburdened.
    • 250 workdays per year, three shifts a day
    • 40 hr work week
    • The problem is scrapping 8% of the product
    • The problem also creates 4% of product that is reworked to an acceptable condition.
    • Production volumes 1200 per shift
    • Cost to produce a good item: $255 ($100 material and $155 labor)
    • Selling price: $315
    • Rework adds $80 labor cost to each item reworked.
    • Your goal is to remove half of the impact of the problem.
    • You team involves 6 people.
    • You plan 1.5 hrs of team meetings each week
    • You expect the team members to spend one additional hour a week on the project.
    • You expect to spend 20 hrs a week on the project (includes team meetings)
    • You plan to finish in 3 months (13 weeks)
  1. Assume that you finish one week late and accomplished a 50% reduction in the problem. What is the first and second yearly savings for the company? Provide a next 12 month savings that account for the cost to solve the problem and the savings for the second 12 months without the cost to solve the problem.
  2. Estimate the CODND for the entire problem.

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