MOM705: Ali makes ping-pong balls in his Malaysia plant. With recent increases in his costs, he has a newfound interest: Operations Management Assignment, AeU, Malaysia

Evergreen Pharmaceutical uses an unstable chemical compound that must be kept in an environment where both temperature and humidity can be controlled. Evergreen uses 800 kg per month of the chemical, estimates the holding cost to be 50% of the purchase price (because of spoilage), and estimates order costs to be $50 per order.  The cost schedules of the two suppliers are as follows:

• What is the economic order quantity for each supplier?
• What quantity should be ordered? Which Supplier should be used?
• What is the total cost for the most economic order size?
• What factor(s) should be considered besides total cost?

Question 4

The demand for subassembly S is 100 units in week 7.  Each unit of S requires 1 unit of T and 2 units of U.  Each unit of T requires 1 unit of V, 2 units of W, and 1 unit of X.  Finally, each unit of U requires 2 units of Y and 3 units of Z.  One firm manufactures all items.  It takes 2 weeks to make S, 1 week to make T, 2 weeks to make U, 2 weeks to make V, 3 weeks to make W, 1 week to make X, 2 weeks to make Y, and 1 week to make Z.

• Construct a product structure. Identify all levels, parents, and components.
• Construct a net material requirements plan using the following on-hand inventory.