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The Tasks
As a consultant of the above RP facility you should produce a detailed report, including the following
elements:
(i) Design Value Stream Map of the facility based on the SC approach considering that the
RP facility is serving individual customers or is receiving orders from a larger RP company
which subcontracts some of their services. When designing the SC structure, define the
value chain components, support functions, customers and suppliers, communication
and transportation means.
(ii) Estimations of the inventory level of the system including: Average Aggregate Inventory
Value (AIV), Weeks of supply (WS) and Inventory turnover (IT). Advise the company on
the action to be taken assuming that the best inventory turnover in the company’s
industry according to the benchmarking survey is 6 turns/year.
(iii) Estimations of the Economical order cycle (EOQ) for the powders if the transportation
company in the supply chain is charging 100 £ per delivery sufficient to produce 50 units
and the holding costs due to the material becoming obsolete are 20% of the cost of the
materials. Comment on the average flow time, CI and number of orders per year. Advise
the RP facility on the safety inventory policy if lead time replenishment is 5 days and
cycle service level aims to achieve 90%.
(iv) Analysis and recommendations on the outsourcing policy of the RP burro. This section
more specifically has to contain:
? Recommendations on subcontracting possibilities for steel castings if the price
for an ‘outsource’ item is 650 £ and the fraction of the fixed costs for running
the installation involved is 63000 £;
? Analyses on segmentation of the product A (Polyamide prototypes) pricing
policy to: Segment 1 (high price) – receiving orders directly from customers, and
Segment 2 (low price) – receiving orders through large International RP burro.
The demand curve was determined to be Price = 2000 – (2.85 · Demand).
Suggest prices for high and low value segments, as well as the optimal demand
for each segment; support this by revenue estimates.
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