What is the Economic Order Quantity?

EXERCISE (20%):

An automobile manufacturer plans to produce 70,000 cars in the next year. All cars planned for production use the same headlamps (2 units per car); therefore, demand for the lamps for the next year is known to be 140,000 units. The purchasing agent wants to know how many lamps to buy at one time. Historically, lamps have been received two days (lead time) after they were ordered. It costs € 11 to order lamps, and the holding-cost fraction used by the auto company is 23 % per year. The lamps cost is €0,55 each.

1. What is the Economic Order Quantity?
1. What is the number of orders per year?
1. What is the frequency of orders? Assume the company works 365 days a year.
1. The company works with a Safety Stock of 3 days. What is the level of this stock?
1. What is the Average Stock?

PART 3:

CASE STUDY: (40 – 20% each question)

Select any production company that operates in the global markets and explain the following points:

1. Type of production system
2. Concept of “global production” (provide examples).

The Mid-term assignment must be prepared individually in essay format (word, pdf files).

Formalities:

• Wordcount for both assignments: 1000 words.
• Font: Arial 12,5 pts.
• Text alignment: Justified.
• The in-text References and the Bibliography have to be in Harvard’s citation style.

It assesses the following learning outcomes:

• Outcome 1: Understand the production management within operation management.
• Outcome 2: Describe operations processes design and their management to contextualize and improve production performance.
• Outcome 6: Understand production in the global setting.

Task 2 – FINAL SUMMATIVE ASSIGNMENT

PART 1

CONTEXTUALIZED LAYOUT COMPARISON: (15%)

In a magnet factory the boss is considering a reorganisation of the lay-out. She is considering the two proposals below. Which is the best way? Complete the table below and justify your recommendation with the reasons why.

LAY-OUT 1                                                                           LAY-OUT 2

Recommendations and Justification

PART 2: (45% – 15% each question)

1. Choose a specific operations system within a specific industry.
2. Briefly explain the phases of PPC of at least one process/product, identify the main drivers or factors that determine its overall performance.
3. Propose different measures and actions to take to enhance the productivity.

PART 3:

CASE STUDY: (40 – 20% each question)

CATALFEN

Company CATALFEN is located in Barcelona. They design and manufacture high-tech LED lighting. The company is family owned (Angel Hernandez, owner) exporting 75% of their production to 25 different countries all over the world. Products are usually customized considering different design requirements, voltage, frequency as well other electrical parameters. Quality control has been implemented at the end of the production process. Each and every component is dimensionally and electrically checked by one employee separating out the wrong units. During the last 2 years, sales have experienced a dramatic growth. However, rejections have also increased from 0,3% up to 3% of the total production. Alicia Hernandez, owner´s daughter has recently graduated from the EU Business School. She has joined the Company with the main task of improving quality ratios.

1. Identify and explain the main weaknesses of the existing quality control process?

2. If you wanted to improve the Quality Control process and the performance indicators of the company, which changes should you implement in terms of quality control? Which quality systems should you put in practice?

The Final assignment must be prepared individually in essay format (word, pdf files).

Submission: Sunday 17th July, 2022 at 23:59 CEST – Via Moodle (Turnitin).

Formalities:

• Wordcount for both assignments: 1000 words.