PD2 IET 224 Project Deliverable 2

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Institute of Business Administration, Karachi (Main Campus) *

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Business

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Nov 24, 2024

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Project Deliverable 2 Semester : Fall Year : 2023 Course Title : Integrated Production Systems I Course Code : IET 224 Instructor(s) : Benjamin Rouanet (Includes names of all instructors teaching this course) Submission Date : 28.11.2023 To be completed by the student Student Names : Hamzah Albloushie- 96242 Abdullah AlDosari - 95583 Mohammad alkandari - 96149 Student ID : Department : Eng. & Tech Major : IET Section : U1 Integrity Statement : “I affirm that I completed my assignment on my own abiding by the rules in ACM Student Handbook. I did not receive any external help, use any unlawful resources or commit plagiarism.” Signature : Grading Scheme Question Earned Points Max. Points Question Earned Points Max. Points 1 50 6 2 30 7 3 20 8 4 9 5 10 Total Earned Points Total Available Points Instructor Name 100 Benjamin Rouanet Important Notes: - Any attempt at plagiarism will be reported. All ACM handbook academic misconduct rules will be applied .

- It is the responsibility of the student to submit this online exam paper to the instructed online platform (Moodle, Turnitin) Project Deliverable 2 In the Corona period, Talabat was used extensively by the people in Kuwait and they used good packages for the food so that it does not get cold easily. This year, they asked your team to come up with a new design of box to carry multiple products inside. So the box you design should have the following properties: 1. It should be large enough to carry the food for four people. 2. It can be of materials wood, metal, carton, or plastic. 3. It should have a cover so that the food is protected. a) Design your box according to the story above. Put its picture here. Bring a box reflecting your design to the classroom. (30 Points)

b) Determine and discuss how much you think you can sell to Talabat per year. (5 Points) The box is made of high-quality materials, has good insulation properties, and is designed to keep food warm for an extended period, it may command a higher price than a simpler, lower-quality box. We would sell the boxes in 1000 pieces per purchase. Therefore: Total cost = Selling price per piece x Quantity Total cost = 0.0285 KD x 1000 pieces Total cost = 28.5 KD We assume to sell +/- 10 000 pieces a year, therefore: 10 000 x 28.5 KD = 285 000 KD Per year c) Determine the selling price of your box by discussing materials, labor force, inventory, supply chain and rate of return from each product. (5 Points) • Materials: The cost of materials used to produce the box should be calculated. This includes the cost of the raw materials used, such as cardboard, as well as any other materials used in production, such as foil and insulators. • Labor force: The cost of labor required to produce each box should also be calculated. This includes the wages of the workers involved in the production process, as well as any benefits and overhead costs associated with labor.

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• Inventory: The cost of inventory should be considered when determining the selling price of a box. This includes the cost of storing and managing inventory, such as rent, utilities, and insurance. • Supply chain: The cost of the supply chain, including shipping, transportation, and other related expenses, should be calculated. This cost may vary depending on the location of the production facility, the shipping distance, and other factors. • Rate of return: The desired rate of return on each box sold should be determined. This represents the profit margin that the seller hopes to achieve on each sale. Using these factors, the selling price of a box can be calculated. Assuming a selling price of 0.0285 KD per box, the total cost of materials, labor, inventory, and supply chain, plus the desired rate of return, should not exceed this amount. For example, if the cost of materials, labor, inventory, and supply chain for each box is 0.02 KD, and the desired rate of return is 0.0085 KD, then the selling price of the box would be: 0.02 KD (cost of materials, labor, inventory, and supply chain) + 0.0085 KD (desired rate of return) = 0.0285 KD (selling price per box) d) Use the number in b) as demand per year. Also use the number in c) as your purchasing cost. Each time Talabat has to pay a truck cost of 100 KD. The interest rate is 10%. Calculate the EOQ. (10 Points) EOQ = sqrt((2 * D * S) / H) Where:  D is the annual demand (given as 1,000 boxes per year in b))  S is the cost per order (given as 100 KD per order, the cost of the truck)  H is the holding cost per unit (which is equal to the interest rate, 10%, multiplied by the unit cost) Unit cost = 0.0285 KD (purchasing cost per box) + (100 KD / 1,000 boxes) = 0.1285 KD per box  EOQ = sqrt((2 * 1,000 * 100) / (0.1285 * 0.10)) = 1,167.43 Rounding up, the EOQ for this scenario is 1,168 boxes. This means that Talabat should order 1,168 boxes at a time to minimize the total cost of ordering and holding inventory.

If Talabat orders more or less than this quantity, the total cost of ordering and holding inventory will be higher. Note that the EOQ assumes that demand is constant and that there are no stockouts or backorders. In reality, demand may fluctuate, and there may be other costs and constraints to consider when ordering inventory. PART 2 (40 Points): IET Tech. Company produces filled bottles which consist of bottle and 2 balls. However, the company buys bottles and balls from suppliers. Inside of the company there is only filling process that is performed. For Bottles: • Each bottle costs to IET Tech Company 1.5 KD/bottle. • Each time company order bottles, it cost to company 20KD/order. • Annual holding cost is 20%. For Balls: • Each ball costs to IET Tech Company 0.7 KD/ball. • Each time company order balls, it cost to company 20 KD/order. • Annual holding cost is 20%. Company sells these filled bottles inside of the box which has 100 filled bottle in it. If demand of boxes is 4000 / year, answer the following questions. a) What is the optimal order quantity for bottles? (10 Points)  EOQ = sqrt((2DS)/H) D = annual demand = 4000 boxes per year S = setup cost per order = 20 KD per order H = holding cost as a percentage of unit cost = 20% of 1.5 KD = 0.3 KD

Therefore: EOQ = sqrt ((2400020)/0.3) = 547.72 Therefore, the optimal order quantity for bottles is 548 bottles per order. b) What is average annual total cost for bottles? Total cost = (D/Q) * S + (Q/2) * H * C Q = order quantity = 548 bottles C = unit cost of bottle = 1.5 KD Therefore: Total cost = (4000/548) * 20 + (548/2) * 0.3 * 1.5 = 433.33 KD Therefore, the average annual total cost for bottles is 433.33 KD. (10 Points) c) What is the optimal order quantity for balls? EOQ = sqrt((2DS)/H) (10 Points) D = annual demand = 4000 boxes * 2 balls per box = 8000 balls per year S = setup cost per order = 20 KD per order H = holding cost as a percentage of unit cost = 20% of 0.7 KD = 0.14 KD EOQ = sqrt((2800020)/0.14) = 1908.10 So, the optimal order quantity for balls is 1909 balls per order. d) What is average annual total cost for balls? (10 Points) Total cost = (D/Q) * S + (Q/2) * H * C Q = order quantity = 1909 balls C = unit cost of ball = 0.7 KD Total cost = (8000/1909) * 20 + (1909/2) * 0.14 * 0.7 = 228.08 KD Therefore, the average annual total cost for balls is 228.08 KD.

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PART 3 (10 Points) Summarize the first chapter of the video below (Chapter ‘’Industrial Robots’’, from 00:00 to 03:26min). The first chapter of the "Industrial Robots" video provides an overview of the history and evolution of robots in the manufacturing industry. It explains that robots were initially used for assembly line processes in the 1960s and have since become more advanced and capable of performing a wider range of tasks. The video emphasizes how robots can perform dangerous or unpleasant tasks that would be challenging for human workers and work with greater speed and precision. The chapter highlights the importance of robots in modern manufacturing and the continued development of robotic technology.

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