RM Company is looking to change its numerically controlled machines into a flexible manufacturing system. The transition will handle about 30% of RM Company’s work. There will be additional costs for startup process. The new system is likely to reduce the inventory, floor space, production time and number of labors required. The annual labor savings is a huge sum on the implementation of the new process. The company’s return on investment states that it should be at least over 15% for a new process to be implemented and the payback period should be less than 5 years. To determine: The recommendations made by the production manager at RM Company.

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Chapter 7, Problem 1CS

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RM Company is looking to change its numerically controlled machines into a flexible manufacturing system. The transition will handle about 30% of RM Company’s work. There will be additional costs for startup process. The new system is likely to reduce the inventory, floor space, production time and number of labors required.

The annual labor savings is a huge sum on the implementation of the new process. The company’s return on investment states that it should be at least over 15% for a new process to be implemented and the payback period should be less than 5 years.

To determine: The recommendations made by the production manager at RM Company.

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