Operations Management: Processes and Supply Chains (11th Edition)
Operations Management: Processes and Supply Chains (11th Edition)
11th Edition
ISBN: 9780133872132
Author: Lee J. Krajewski, Manoj K. Malhotra, Larry P. Ritzman
Publisher: PEARSON
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Chapter 3, Problem 1DQ

Should a very pricey handcrafted object of beauty use automated equipment for manufacturing some of its component parts needed for assembling the object? Do you think it is a mistake to use automation in this way?

Expert Solution & Answer
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Summary Introduction

To determine: Usage of automation.

Introduction

Automation is a process that needs to be used for bulk production and where the risk is high in percentage. The techniques, method or system of operating a process by highly automatic means as by electronic devices, reducing human intervention to a minimum.

For example

A company that produces packed snack items, components of car, bottled beverages.

Explanation of Solution

Using automation for manufacturing components parts used in assembling a product depends on the nature and could be standardized. Then automated equipment can be used in manufacturing such products. On the other hand in case, the parts to be manufactured are going to be less in number. Then automation should not be used as the cost because setting up the automation process would be very high and that too for manufacturing the small number of products.

Automation can be used when the products are standardized. Automation can not be used when the product can not be standardized and requires logic to be used. In the case of the manufacturing of costly products, automation can not be used as it requires artistic skills.

Automated equipment or a robot can definitely help us in assembling but certain logics will have to be applied. While assembling a costly product. The robot will lack logical thinking as it a programmed device. It can only obey orders and execute commands, hence the chance of errors increase which manufacturing costly products.

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The S&OP team at Kansas Furniture, led by David Angelow, has received estimates of demand requirements as shown in the table. Assuming one-time stockout costs for lost sales of $100 per unit, inventory carrying costs of $20 per unit per month, and zero beginning and ending inventory, evaluate the following plan on an incremental cost basis: Plan A: Produce at a steady rate (equal to minimum requirements) of 1,100 units per month and subcontract additional units at a $65 per unit premium cost. Subcontracting capacity is limited to 800 units per month. (Enter all responses as whole numbers). Ending Month Demand Production Inventory Subcontract (Units) 1 July 1300 1,100 0 2 August 1150 1,100 0 3 September 1100 1,100 0 4 October 1600 1,100 0 5 November 1900 1,100 0 6 December 1200 1,100 0
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