INSTRUCTIONS

Complete this assignment in Word or Excel. Upload into the Assignment 3 Module in Brightspace for grading. Assignments need to be submitted on or before the due date specified by the instructor. Consult the course calendar for assignment due dates. This assignment covers the content learned in Lessons 6, 7, and 8.

1. Case Study Types of Layout (20 marks)

TIPL is a manufacturer in Ottawa, Ontario and specializes in sports memorabilia. Their specialty is to make 3-D images of past and present athletes used as promotional giveaways. TIPL started as a 2-perspon company owned and operated by Anthony and Rose, a married couple that met in art school. The couple started their business as a hobby doing their work in spare room on the main floor of their home. The business grew and they moved their operation to their 1200 sq. foot basement where space was sufficient for the 100 figures they would mold and paint on average each month for clients.

The process is simple and the couples unique feature is their ability to capture the athlete they portraying in a very life-like way, more so then their competition. When an order is received, Rose reviews photos of the athlete. Using a 3-D photo sculpting machine, a rough sculpture is created out of plastic. Roses sculpting techniques take over and the life-like features are added to figure. This is called a master from which molds are made. Anthony has created a process to multiply the molds quickly using a rubber that is recyclable. Once a job is finished, the master mold is kept and the rubber is recycled into new molds. Depending on the job size, Anthony will make 10 to 50 molds from the master.

Once the molds are produced, production can begin. Chemicals are mixed with resin and poured into the molds. The pouring occurs late in the day so that the product can cure over night. The next morning the figures are pulled from the molds. The figures are then painted which takes approximately two days with four local artisans who are either retired or work part time and like the extra income. Each figure is approximately six inches tall and 2 to 3 inches wide at its widest point. Once the figures are dry, a product label is affixed to its base. The label identifies the product as a hand crafted original from the artisans at TIPL and made in Canada. TIPLs office number is also on the base of the product.

Last week Rose answered the phone and Anthony watched her eyes get bigger and bigger as the conversation continued. A large marketing company in the US wants to make TIPL there sole provided or sports figurine memorabilia for several pro sports teams, college football teams, with expectations to grow into additional teams at the pro and college level. They would be licensed with all the major professional sports and college associations. Ultimately they would be expected to produce 2,000 figures per month with 20% growth each year likely to a maximum of 5,000 figures per month. The marketing company did not want to use an overseas manufacturer. They want a consistent high quality product that they feel they can have a close relationship with the company they work with. With the license, TIPL would be allowed to distribute and retail any excess products produced but only in Canada. All US sales would be to the marketing company that would act as a distributor selling to the sports retailers and directly to the teams.

Anthony and Rose hire you to design their new location. They would like their new location to be sufficiently large to manufacture the quantity of product they will grow to. They would also like sufficient space for distribution as well as space for a retail outlet as part of their building. They would like you to draw the layout for the different activities within the main areas of manufacturing, distribution, and retail. In addition to hiring production workers, Rose and Anthony expect they will need to hire 5 office workers to handle the finance and administration activities of the organization.

Submit the layout for Rose and Anthony. You may use the drawing tools in WORD and / or Excel. Make sure that for each activity, there is a written description describing why your layout is right for that activity. Layout 1 page. Description 2 pages in total. Total pages submitted to Anthony and Rose = 3 pages.

Hint: You can if you like, but it is not mandatory to incorporate the area dimensions. You should show the placement of all of the production stations, departments, and other areas. The key to a good layout is minimizing movement cost and maintaining safety.

2. Load and Movement Cost (10 marks)

The city of Lispat takes its driving safety very seriously. First time drivers must go through a more rigorous exam process than found in most other cities. All drivers must first receive an in class certificate for learning the rules of driving and safety standards. They must also spend at least 20 hours with an instructor for driver training. Once they take their drivers test and pass they are given a certificate and must go take this to one central municipal building where there are stations and tests before receiving an official license to drive. The stations are as follows:

Station A The driver shows their certificate for passing the driving test and receives an A stamp.

Station B The driver takes an eye test. With a pass, the certificate receives a B stamp.

Station C The drivers legal record is reviewed. If the drivers record is clean, the driver receives a C stamp.

Station D The driver takes an online rules and safety test. When a drives passes the test a slot opens on the testing machine to place the certificate into to receive a D stamp.

Once all four stamps are received, the driver can take the certificate to another building to receive an official drivers license.

The layout for the first building is as follows:

|---20---|---20 ---|----20----|

The 20 refers to the distance between the stations and we will assume the measure is in feet.

The building is always very busy since it is the only location to service the entire city. Drivers tend to want to get the testing out of the way first. A typical day shows the following movement new drivers take when they enter the building.

The chart shows the movement of people between stations in the column to stations in the row.

For example, 20 people move from Station A to Station B; 100 people move from Station A to C; 150 from B to D; etc.

A) Calculate the movement cost of the current layout. Note that the cost is not measured in monetary terms. The cost is the distance. (4 marks)

B) Create a better layout and the new movement cost. The layout must be linear.

What is the movement cost savings? (6 marks)

Hint: Cost does not always have to be stated in terms of dollars. Distance can be the cost.

A hint for this question is as follows: If 20 people move from station A to B and 100 people move from A to C, and distance between these stations is 5 feet and that was all the movement, the cost is:

(A to B) + (A to C) = (20 x 5) + (100 x 5) = 100 + 500 = 600 feet.

To create a better layout you move the stations that have the most movement between them closest or beside each other.

1. ABC Analysis (10 marks)

A distributor of building supplies sells a line of designer trim to small construction companies. The line is described in the table below:

A) Show how this line would be classified using an ABC analysis.

B) Explain how this company will use the information developed from the ABC analysis.

Hint: Add columns to the chart for Annual Demand in $, % of annual demand, and Ranking. See the example in the lesson notes to calculate the percentage of annual $ demand for each item. Use that percentage to rank each item as A, B, or C.

Question 4 is on the next page.

4. Cylce Counting (4 marks)

Leemin Enterprises carries 9,000 items of outdoor garden dcor. Its owner, Peter Ng, uses an ABC classification system. 7% of the items are classified as A. 33% of the items are classified as B. The remaining items are classified as C. Peter wants his operations staff to count the A items monthly, the B items quarterly, and the C items semi-annually. Leemin uses 20 days per month for calculations.

How many items of each classification and in total need to be counted each day?

Hint: See the example in the lesson notes.

5. EOQ (16 marks)

Guys BBQ Grille in Saskatoon serves 5,000 steaks per year. The steaks are kept in a freezer. The holding cost for each steak is $1.50. The cost to place an order is $45. The lead time is 4 days and there are 250 working days per year.

i) What is the optimal order quantity (EOQ)?

ii) What is the average inventory? Hint: Use the EOQ calculated in i).

iii) What is the annual inventory holding cost?

iv) How many orders would be placed each year?

v) What is the annual ordering cost?

vi) What is the total annual cost to manage the inventory?

vii) How many days on average are there between orders?

viii) What is ROP?

Hint: See the example in the lesson notes.