Novelty Item and Order Additional Wheels
CASE: Promotional Novelties
Promotional Novelties provides a wide range of novelty items for its corporate customers. It has just received an order for 20,000 toy tractor-trailers that will be sold by a regional filling station company as part of a holiday promotion. The order is to be shipped at the beginning of week 8. The tree diagram shows the various components of the trucks.
The company can complete final assembly of the tractor-trailers at the rate of 10,000 a week. The tractor and truck bodies are purchased; lead time is three weeks. The wheels are the manager’s main concern.
The company has a sufficient supply of brackets on hand. Assembly time is one week each for tractors, trailers, and wheel assembly. However, the wheel department can only produce wheels at the rate of 100,000 a week. The manager plans to use the wheel department to full capacity, starting in week 2 of the schedule, and order additional wheels from a supplier as needed. Ordered wheels come in sets of 6,400. The lead time for delivery from the supplier is expected to be two to three weeks.
Questions
a. How many wheels sets should the manager order?
b. When should the wheels sets be ordered? Solution
a. Total wheel needed = 20000*18 = 360000
Assembly time for tractor, trailor and wheel assembly= 2 weeks
So,
If order is needed at beginning of 8th week.
10,000 tractor-trailor should be made in 7th week and
10,000 tractor-trailor should be made in 6th week
So,
Production should start at beginning of 4th week
So, wheels required at beginning of 4th week = 10000*18 = 180000
Wheels produced from 2nd week to end of 3rd week= 200000
This will meet the demand for first lot
Now, for second lot
Wheels required at beginning of 5th week = 180000
Wheels in hand = 20000 +100000 = 120000
So, wheels to be ordered = 60000
b. The wheels should be ordered at beginning of 2nd week
Promotional Novelties provides a wide range of novelty items for its corporate customers. It has just received an order for 20,000 toy tractor-trailers that will be sold by a regional filling station company as part of a holiday promotion. The order is to be shipped at the beginning of week 8. The tree diagram shows the various components of the trucks.
The company can complete final assembly of the tractor-trailers at the rate of 10,000 a week. The tractor and truck bodies are purchased; lead time is three weeks. The wheels are the manager’s main concern.
The company has a sufficient supply of brackets on hand. Assembly time is one week each for tractors, trailers, and wheel assembly. However, the wheel department can only produce wheels at the rate of 100,000 a week. The manager plans to use the wheel department to full capacity, starting in week 2 of the schedule, and order additional wheels from a supplier as needed. Ordered wheels come in sets of 6,400. The lead time for delivery from the supplier is expected to be two to three weeks.
Questions
a. How many wheels sets should the manager order?
b. When should the wheels sets be ordered? Solution
a. Total wheel needed = 20000*18 = 360000
Assembly time for tractor, trailor and wheel assembly= 2 weeks
So,
If order is needed at beginning of 8th week.
10,000 tractor-trailor should be made in 7th week and
10,000 tractor-trailor should be made in 6th week
So,
Production should start at beginning of 4th week
So, wheels required at beginning of 4th week = 10000*18 = 180000
Wheels produced from 2nd week to end of 3rd week= 200000
This will meet the demand for first lot
Now, for second lot
Wheels required at beginning of 5th week = 180000
Wheels in hand = 20000 +100000 = 120000
So, wheels to be ordered = 60000
b. The wheels should be ordered at beginning of 2nd week