QUESTION ONE

Recently VOX WAGEN car manufacturing company began assembly operations in Kenya. For them to be competitive in the ever changing market, the material management division had carefully analyzed their demand patterns and set up material requirement planning to make available either purchased or company manufacturing assemblies just before they are required by the next stage of production or for delivery. In the month of July 2020, they established that the demand for VOXWAGEN POLO was 50 units. Each VOXWAGEN POLO car requires four units of A and 6units of B. Each A requires 3Cs, four Ds and five Es. Each B requires one E, one F and two Gs. Each F requires three Cs, four Es and two Hs. The annual production requirement for unit A was expected to be 2400; the ordering cost of the unit was established to be Ksh 50 per order while storage and interests were estimated to be Ksh 5 per unit per annum based on the average annual stock.

a)Hypothesize three developments that led material management department into taking such crucial management steps to material management

b)Explorethreematerial redundancy techniques that VOXWAGEN should strive to achieve for optimal performance

c)Derive the economic order quantities(EOQ) for unit A at one particular time

Explode the end product (Voxwagen polo) into its various assemblies, subassemblies or components at various levels to produce 50 cars to meet the demand