Assignment on the Operations Management at an assumed company

Question one:

You have been asked to put together a capacity plan for a critical operation at a company. Your capacity measure is number of machines. Three products (men’s, women’s, and children’s sandals) are manufactured. The time standards (processing and setup), lot sizes, and demand forecasts are given in the following table. The firm operates three 8-hour shifts, 5 days per week, 50 weeks per year. Experience shows that a capacity cushion of 5 percent is sufficient.

How many machines are needed?                                                                         15 marks

To calculate the total number of machine needed we will use the following formula.

Thus, total machines required for one year business operations are 15.

Question Two:

In a company the demand is measured in machine-hours. Management is concerned about the capacity in the assembly department. The weekly production requirements for the assembly department are as follows. Calculate the average weekly production requirements by Monte Carlo simulation technique.                                               15 marks

According to the historical records and data, production requirements vary over the time in the production and assembly departments of the company. For monte carlo simulation, business administration need to have information about relative frequency that is calculated in the following table.

The weekly relative frequency is calculated by the use of following formula:

Thus, the average weekly production is around 447 as concluded by the monte carlo simulation.