MG 370 Project – Spring 2015
Segments
Process Flow
1.
Describe the product or service you are creating
2. Identify an individual or team of individuals to be responsible for developing the
flowchart and, ideally, for subsequent analyses.
3. Specify boundaries of the transformation process
4. Identify and sequence the operational steps or the activities necessary to complete the
output for the customer.
5. Identify the performance metrics for the operational steps or the activities within the
selected transformation process
6. Draw the flowchart, using a swimlane format, defining and using symbols in a consistent
manner.
Supply Chain
1. Identify Suppliers at least three tiers back.
2. Identify Customers; include distributors, stores and end users
3. Identify types of transportation between tiers; should be appropriate for the product.
4. Draw a flow chart using the swimlane format.
Process Selection
1. State which process flow is most representative of this product/service?
a. Use the terms and definitions found in the chapter to explain why you made this choice.
b. Be sure to discuss the process design characteristics discussed in class that define the
process flow type.
2. State which Order Fulfillment is most representative of this product or service?
a. Use the terms and definitions found in the chapter to explain why you made this choice.
b. Identify the order penetration point on the process flow chart.
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Forecasting
1. Using the past actual demand you found from your research (the video), determine which of the
following forecasting techniques would provide the best forecast for the Anejo style of Tequila.
(Notes: 1. assume that the 3 types of Tequila are demanded in equal amounts; 2. Remember
there are 3 types of Tequila identified in the video; 3. Assume that the distillery is working 300
days per year)
a. Naïve, Moving Average, Weighted moving average (0.5,0.4,0.1) and the exponential
smoothing (using alpha of 0.75).
b. Using the MAD select the best forecast technique
c. Using the Tracking Signal monitor the past 12 months of actual demand and forecast to
see if it is consistent within the +/- 3.75 range.
d. Show all work in an excel spreadsheet
i. Make sure your work is organized
ii. Title the spreadsheet as an appendix
2. Using the selected forecast technique forecast the next 6 months (Jan thru Jun) of demand.
a. Assume that your forecast is accurate and is the actual for the forecasted month.
3. Write in a paragraph format describing your results.
a. Why you chose the forecast technique, reference the appendix.
b. The next 6 months of forecasted demand (put in a table and add to word doc)
Aggregate/Capacity Planning
1. Using the forecasted demand, determine the preferred strategy for satisfying the demand
2. Use the following assumptions
a. Your production rate is 5500 per vat.
b. Run 3 batches per vat each week
c. There are a total of 225 vats available but only 85% can be used at any one time. The
other 15% are in maintenance or being cleaned.
d. Some of the reserve vats can be used but they will require overtime to clean them. It
takes an additional 250 labor hours to clean each added vat.
e. The maximum number of added vats is 6.
i. If you need more than 6 for a month then request how many more and for what
month.
f. The maximum labor hour over time is 10% of the total monthly labor hours. Beyond
that you will need to hire a new person.
g. Inventory can be used but only up to 25% of the regular capacity in liters.
h. You pay $5 per hour for regular time
i. Overtime is time and a half
j. Subcontracting is not allowed
k. Backorder is $5/month/liter
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l. Hiring is $150 per worker
m. Layoff is $200 per worker
n. Inventory is $5 per month/liter
o. Labor force in Jan is 200 workers
p. Worker works 200 hours per month
3. Identify the Master Production Schedule for the 6 months
a. Find a solution for the following
i. 85% usage of vats using OT, Backorder and, inventory
ii. Use a leveling strategy, define the % Usage of vats, use OT, Backorder and
Inventory where needed.
b. Identify the cost of producing the 6 month forecast for each solution
c. Use the spreadsheet we discussed in class
d. Label it as an appendix
4. In the narrative cite the MPS, the total cost to product for the year and the strategy used.
a. Cite sections and values from appendix
MRP
1. Using the MPS from the Capacity planning exercise compute the timing and quantity (Planned
order releases) for the independent and dependent good.
a. Divide each monthly demand into 4 equal weeks
b. Compute the Planned Order Release and Planned order receipts for Jan and Feb only.
c. Compute the work orders or purchase orders for all the variable inputs into the
product/service.
d. Identify the week in which the work order or purchase order is released to the vendor or
shop floor.
e. Identify the quantities for each work order or purchase order in the quantities stated for
that input (i.e. liters, cases, 100lbs bags).
f. Use the following data which comes from the Inventory control document for each
input.
i. Tequila
1. Per Units is in Liters
2. Leadtime is 1 week
3. Lot size is 1 vat (5500 liters or 5.5(000))
4. No Scheduled Receipts
5. No Inventory
6. Order is in vats
ii. Aqave
1. Per Units is 15lbs/liter
2. Leadtime is 1 week
3. Lot size is 30 Kilos (66 lbs)
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4. No Scheduled Receipts
5. Inventory there is 6600 lbs
6. Order is in Aqave hearts
iii. Bottles
1. Per Units is 1 bottle/liter
2. Leadtime is 2 week
3. Lot size is a case (12 bottles)
4. No Scheduled Receipts
5. Inventory there are 360 bottles
6. Order is in Cases
iv. Labels
1. Per Units is 1 label per bottle
2. Leadtime is 2 week
3. Lot size is a roll of 50 labels
4. No Scheduled Receipts
5. Inventory there is 300 rolls
6. Order is in rolls
7. Labels are order according to the number of bottles ordered.
v. Corks
1. Per Units is 1 label per bottle
2. Leadtime is 3 week
3. Lot size is a roll of 200 per case
4. No Scheduled Receipts
5. Inventory there is 200 cases
6. Order is in cases
7. Corks are order according to the number of bottles ordered.
vi. Boxes
1. Per Units is 1 box per 6 bottles
2. Leadtime is 1 week
3. Lot size is a pallet of 20 boxes
4. No Scheduled Receipts
5. Inventory there is 200 pallets
6. Order is in pallets
7. boxes are order according to the number of bottles ordered.
g. Use the format we used in class
Inventory Control
1. Using the appropriate quantity and reorder point method compute the following.
a. The distillery is open 50 weeks per year
b. The distillery is open 300 days per year
c. Find service level using the Normal distribution table.
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d. Batch quantity for the independent good
i. The annual demand is 150million liters
ii. The cost to clean and setup a vat is 250 hours of cleaning at $5 per hour.
iii. The cost to hold a bottle for one year is $5.
iv. The production rate is 3,267,000 per week (from MPS).
v. 20% of production goes to bottling each week.
vi. What is the optimal batch size per week (Qrun)?
vii. What is the cycle time (time on and time off ) for a piece of equipment in the
process.
e. Batch quantity for the dependent goods
i. Bottles
1. Annual Demand is 12.5M cases
2. Ordering cost is $400/order
3. Holding cost is 5% of item cost
4. Case is $3
ii. Labels
1. Annual Demand is 3 Million rolls
2. Ordering cost is $250/order
3. Holding cost is 5% of item cost
4. Roll is $7.50
iii. Corks
1. Annual Demand is 750K cases
2. Ordering cost is $200/order
3. Holding cost is 5% of item cost
4. Case is $25
iv. Boxes
1. Annual Demand is 1.25 M pallets
2. Ordering cost is $200/order
3. Holding cost is 5% of item cost
4. Case is $15
f. What is the reorder point for the dependent goods
i. Assume the distillery works 300 days per year and 50 weeks.
ii. The lead times for each dependent item are the same as in given in the MRP.
iii. The standard deviation for lead time is 1 day
iv. The daily demand is constant
v. You wish to have a 99% service level that you will be able to meet demand from
inventory.
vi. Find the reorder points for the dependent demand items.
Quality Management System
1. Identify where in the process we should check for quality.
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a. Use Process Failure Mode and Effect Analysis form
b. Select 2-4 areas where a failure could cause a significant impact
2. Identify the measurements to be monitored
3. Create a CP and CPK analysis for the failure.
a. The Autoclave must be set between 180-195 degrees F.
b. The manufacturer says that the auto clave should be able to hold the temperature with
a standard deviation of 2 degrees F
c. Answer the question as to whether the process is capable for producing this product for
that measurement.
d. You have tested the autoclave and found that the average temperature is 189.
e. Is the autoclave temperature centered?
4. Create one or more appropriate SPC charts to monitor these failures
a. Use the data in Table 2 and 3 to construct appropriate SPC charts.
i. For a P and C chart use a 3 sigma distribution.
b. State whether the process is in control or not. Specify why?
c. Specify why you used the specific SPC chart in the narrative.
d. Create excel charts showing the SPC charts.
Appendix 1:
Demand
Forecasting information
(million liters)
Company wide
Daily (000)
Types of tequila
Anjeo annually
450
3
150
Days worked
per year
Anjeo Monthly
300
12.5
Jan
Feb
Mar
Apr
May
Jun
Jul
% Capacity
produced /
Month
135%
115%
90%
95%
94%
90%
100%
Produced
(Million
Liters)
16.9
14.4
11.3
11.9
11.8
11.3
12.5
6
Aug
Sep
Oct
Nov
Dec
85%
85%
90%
95%
125%
10.6
10.6
11.3
11.9
15.6
Table 2
2nd Distillation (% alcohol)
Batches
Vat 1
Vat 2
1.00
55.1
55.4
2.00
55.7
54.6
3.00
55.9
55
4.00
55.5
55.8
5.00
54.3
54.6
6.00
55.7
54.3
7.00
55
55.1
8.00
55.4
55.8
9.00
53.7
53.4
Bottles
Box
1
2
3
4
5
6
7
8
9
10
1
3
0
2
3
4
1
0
1
3
18
0.08
0.25
0.00
0.17
0.25
0.33
0.08
0.00
0.08
0.25
Vat 3
55.6
54.4
54.6
54.2
54.9
55.1
55.3
55.6
53.2
per case
12
Z
3
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