As The Production Planner For Scott Sampson Products Inc

148as The Production Planner For Scott Sampsonproducts Inc You Hav

As the production planner for Scott Sampson Products, Inc., you have been given a bill of material for a bracket that is made up of a base, two springs, and four clamps. The base is assembled from one clamp and two housings. Each clamp has one handle and one casting. Each housing has two bearings and one shaft. There is no inventory on hand.

Design a product structure noting the quantities for each item and show the low-level coding.

Determine the gross quantities needed of each item if you are to assemble 50 brackets.

Compute the net quantities needed if there are 25 of the base and 100 of the clamp in stock.

Paper For Above instruction

Effective production planning is vital for manufacturing companies like Scott Sampson Products, Inc., to ensure efficient operations, cost management, and timely product delivery. In this context, understanding the structure of the product, calculating the required quantities, and planning based on lead times form the core of production scheduling and inventory control. This paper discusses designing a product structure, calculating gross and net requirements, developing a time-phased production plan, and analyzing project cash flows including payback period, net present value (NPV), and internal rate of return (IRR).

Product Structure and Low-Level Coding

Creating a detailed product structure (also known as a bill of materials or BOM) involves identifying each component and its relationship with the final product. The goal is to determine the quantities needed at each level of assembly and assign appropriate low-level codes for efficient planning and scheduling.

At the top, the bracket is assembled from a base (1 unit), two springs, and four clamps. The base comprises one clamp and two housings. Each clamp consists of one handle and one casting, while each housing contains two bearings and one shaft.

Assigning low-level codes follows a hierarchical pattern that groups components systematically for production planning. The highest level (the bracket) is assigned level 0. Its components—base, springs, and clamps—are assigned the next level (level 1). Components within the clamps and housings are further assigned descending levels based on their assembly sequence. The structure can be summarized as follows:

  • Level 0: Bracket
  • Level 1: Base, Springs, Clamps (4 units)
  • Level 2: Clamp (1 per base), Housing (2 per base)
  • Level 3: Handle, Casting (per clamp); Bearings, Shaft (per housing)

Each item’s quantity is noted accordingly, facilitating accurate planning for production and procurement. For example, producing 50 brackets requires 50 bases, 100 springs, and 200 clamps (since 4 per bracket). Each clamp requires 1 handle and 1 casting, and each housing needs 2 bearings and 1 shaft, all multiplied by the total number needed for 50 brackets.

Gross Quantity Calculations

The gross requirements reflect total item counts needed to produce 50 brackets, without considering existing inventory. Calculations are straightforward:

  • Brackets: 50 (given)
  • Base: 50 (1 per bracket)
  • Springs: 100 (2 per bracket)
  • Clamps: 200 (4 per bracket)
  • Handles: 200 (1 per clamp)
  • Casting: 200 (1 per clamp)
  • Housings: 100 (2 per base)
  • Bearings: 200 (2 per housing)
  • Shafts: 100 (1 per housing)

This indicates the total quantities required from suppliers or stockpiled inventory if the production is to proceed smoothly.

Net Quantity Computation

Net requirements account for on-hand inventory. With 25 bases and 100 clamps in stock, the net needed quantities are calculated as:

  • Base: 50 - 25 = 25 remaining to be procured
  • Clamps: 200 - 100 = 100 remaining to be procured
  • Springs: 100 (no inventory specified, so full amount needed)
  • Handles: 200 (no inventory specified)
  • Casting: 200 (no inventory specified)
  • Housings: 100 (assumed no stock, so full quantity needed)
  • Bearings: 200 (assuming none in stock)
  • Shafts: 100 (assuming none in stock)

These net requirements are essential for procurement planning to avoid overstocking or shortages during production.

Time-Phased Product Structure and Lead Times

Scheduling components based on lead times ensures timely delivery of all parts necessary for assembly. The bracket is scheduled for completion in week 10. The lead times for components are as follows: bracket (1 week), base (1 week), spring (1 week), clamp (1 week), housing (2 weeks), handle (1 week), casting (3 weeks), bearing (1 week), and shaft (1 week).

The time-phased product structure requires working backward from week 10 to determine when each component must start production:

  • The final assembly of the bracket in week 10 means components with longer lead times need to start earlier. For example, castings require 3 weeks, so they must commence by week 7.
  • Similarly, housings, with a 2-week lead time, should start by week 8.
  • Shorter-lead components, such as handles, shafts, bearings, and springs, can be scheduled accordingly, starting 1 week before the assembly week.

Creating a Gantt chart or schedule confirms that casting begins in week 7, housing in week 8, and other components in weeks leading up to assembly week 10, coordinating procurement and manufacturing activities efficiently.

Start of Casting and Production Schedule

Based on the lead times, the casting must start in week 7 to meet the assembly timeline in week 10. This scheduling aligns with the overall production plan and ensures component availability without delays. Proper synchronization of procurement, manufacturing, and assembly processes minimizes downtime and expedites product delivery.

Financial Analysis of Projects

In evaluating capital investments or projects, three key financial metrics are critical: payback period, net present value (NPV), and internal rate of return (IRR). These measures help determine the viability and profitability of the projects, especially when considering mutually exclusive or independent options.

Assuming two projects with specified cash flows and a discount rate of 11.50%, calculations involve determining the time it takes to recover initial investments (payback), the present value of net cash flows (NPV), and the discount rate that zeroes out the NPV (IRR). These calculations provide insight into the attractiveness of each project and guide investment decisions.

Projects with shorter payback periods, higher NPVs, and IRRs exceeding the discount rate are generally preferred. For mutually exclusive projects, only the best performing one should be selected, whereas for independent projects, multiple projects may be pursued if they meet the investment criteria.

Conclusion

Effective production planning combining detailed product structure design, precise requirement calculations, scheduling based on lead times, and financial evaluation ensures operational efficiency and strategic investment decisions. These practices enable Scott Sampson Products, Inc., to optimize production flows, manage inventories effectively, and make sound financial choices for sustained growth and competitive advantage.

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