The part in question, 3079, is used in two different subassemblies: no. 435, which is used in the Gemini TV stand, and no. 257, which isused in the Saturn microwave stand. One of part 3079 is used in each subassembly, and one of each subassembly is used in each ofthe final products. Part 3079 may be produced in any quantity since the lathe that makes it is not used for anything else. However, both of thesubassemblies are produced using the same equipment. To minimize change over time, Space Age has decided that thesesubassemblies should be made in minimum quantities of 1,000 at a time, although there is no problem with capacity on the equipmentthat makes them. In fact, an order for 1,000 of subassembly 435 is due to be received in week 1, as is an order for 1,000 ofsubassembly 257. Lead time for both these subassemblies is one week, and no inventory is expected to be on hand for either part atthe beginning of week 1. There is not any on-hand inventory of part 3079, and there are no orders in process. Ed Szewczak earns $22 per hour and gets a 50% premium for any overtime work. Whenever part 3079 is made, there is no set-up time,but processing takes 0.03 hour per unit. It costs $0.25 per week to hold any of these parts over from one week to the next. The cost ofholding each subassembly in inventory is $0.75 per unit per week. Develop an MRP for Space Age Furniture Company using the information in the case including the production of sub-assemblies in lot sizes of 1,000. The lot size of 1,000 for sub-assemblies has produced a lumpy demand for part 3079. Suggest ways for improvements over sub-assemblies in lot sizes of 1,000. Analyze the trade-off between overtime costs and inventory costs. Calculate a new […]
