MGT7321

Assignment 3 - 25% - 70 available marks

Q1: Lesson 10: [CLR 7] (25 marks)

a) Hosulton is a well known corporate incentives and awards manufacturer in Ontario. Hoselton mass produces blanks and then customizes the blanks for the company and nature of the incentive or award. Hosulton offers three different materials. The most expensive and profitable is sterling silver, the next is wood, and the third is sales for plastic. Hosulton usually has on hand 7,000 blanks as some organizations will order hundreds of items at a time for large events such as a golf tournament where each participant receives a memento. The company uses and ABC inventory classification system. 8% of the items are sterling silver. 35% are wood. The remaining are plastic. The operations manager of Hosulton would like the inventory counted regularly for audit and control purposes. She would like to count the items as follows: Sterling silver monthly, wood quarterly, and plastic semi-annually. She uses 20 working days per month in her inventory calculations.

a) Calculate the daily count of items by applying the cycle counting method. (5 marks)

b) OCB Inc specializes in selling fair trade organic coffee beans in 1 lb bags. The bags are kept in a cool dry room. The holding cost for each bag is $1.40. The cost to place an order with the various suppliers works out to $35. The lead time is 5 days and OCB sells 7,000 bags of coffee per year to its customers. OCB uses 250 working days per year in its operations. (20 marks)

i) What is the optimal order quantity (EOQ)? (2 marks)

ii) What is the average inventory? Hint: Use the EOQ calculated in i). (2 marks)

iii) What is the annual inventory holding cost? (2 marks)

iv) How many orders would be placed each year? (2 marks)

v) What is the annual ordering cost? (2 marks)

vi) What is the total annual cost to manage the inventory? (2 marks)

vii) How many days on average are there between orders? (2 marks)

viii) What is ROP? (2 marks)

ix) Conduct some research about fair trade coffee and other fair trade products. Why does this contribute sustainability? Make sure to cite your sources. (4 marks)

Allocation of marks:

Q2: Lesson 11: [CLR 6] (25 marks)

Qwik-Assembly is a company that provides assembly services for other companies. One line they assemble is the body of a lawnmower that then gets setn to another assembler to have the motor attached. The BOM tree for the assembly of the lawn mower body is as follows:

	A
G (1)		F (1)
		W (4)		CB (2)

A = Finished lawnmower body

G = Hand Grip

F = Frame

W = Wheels

CB = Cutting Blades

The assembly department already has the frame which includes the seat. Orders for bikes and parts schedules to be received are as follows:

The inventory status is as follows:

Complete the MRP Records for Qwik-Assembly

Part

Lot

Lead

On

Safety

No.

Size

Time

Hand

Stock

Weeks

1

2

3

4

5

6

7

A

Gross Requirements

Scheduled Receipts

Projected on Hand 300

Net Requirements

Planned Order Receipts

Planned Order Releases

Solution

Part

Lot

Lead

On

Safety

No.

Size

Time

Hand

Stock

Weeks

1

2

3

4

5

6

7

G

Gross Requirements

Scheduled Receipts

Projected on Hand 70

Net Requirements

Planned Order Receipts

Planned Order Releases

Allocation of marks:

Question 3: Lesson 13[CLR 4] (20 Marks)

Rick D's Auto is specializes in replacing starters on cars and is well known for the specialty service. Rick and his team of mechanics can replace on average 4 starters per hour. Customers arrive on average at a rate of three per hour. They are served on a first in first out basis and come from wide and populous area. You can say its almost infinite as well since Rick D's is the only service centre that specializes in replacing starters. (10 marks) [L8, Ch. 10] CLR 4

1. Calculate the number of cars or customers in the system on average (5 marks)

b) Calculate the average time each car is in the system (5 marks)

c) Calculate the average number of cars waiting in line (5 marks)

d) Calculate the average wait time per car (5 marks)

Allocation of marks: