Case Study: Spage Age Furniture Co

Space Age Furniture Company

Read “Space Age Furniture Company” in Chapter 9 of your text. ( Vonderembse, M. A., & White, G. P.

(2013). Operations

management. San Diego, CA: Bridgepoint Education, Inc ) Respond to the following and include any

Materials Requirement Planning (MRP) calculations:

• Develop an MRP for Space Age Furniture Company using the information in the case including the

production of sub­assemblies in lot sizes of 1,000.

• The lot size of 1,000 for sub­assemblies has produced a lumpy demand for part 3079. Suggest

ways for improvements over sub­assemblies in lot sizes of 1,000.

• Analyze the trade­off between overtime costs and inventory costs.

• Calculate a new MRP that improves the base MRP.

• Compare and contrast the types of production processing—job shop, batch, repetitive, or

continuous—and determine which the primary mode of operation is and why.

• Describe ways that management can keep track of job status and location during production.

• Recommend any changes that might be beneficial to the company and/or add value for the

customer.

The final case study should integrate readings, scholarly sources, and work and life experiences. It

may include explanation and examples from previous events as well as implications for future

applications.

The Final Paper:

• Must be 11 double­spaced pages in length (not including the title and reference pages) and

formatted according to APA style

• Must begin with an introductory paragraph that has a succinct thesis statement.

• Must address the topic of the paper with critical thought.

• Must end with a conclusion that reaffirms your thesis.

• Must use at least five scholarly sources.

• Must document all sources in APA style.

• Must include a separate reference page, formatted according to APA style

TEXT: Vonderembse, M. A., & White, G. P. (2013). Operations management. San Diego, CA:

Bridgepoint Education, Inc.

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CASE STUDY: Space Age Furniture Company

The Space Age Furniture Company manufactures tables and cabinets to hold microwave ovens and

portable televisions. These products are made in various sizes and with various features, but all follow

basically the same production and assembly operations. However, two of these products—the Saturn

microwave stand and the Gemini TV stand—have a part (no. 3079) that requires machining on a

special lathe used only for making that part. At present the machine is run by Ed Szewczak, a

machinist who also operates other machines in Space Age’s shop. Once set up and started, the lathe

can run nearly unattended. However, the machinist must be present (even if not actually attending

the machine) any time one of the machines, including the lathe, is in operation. At present, Ed works

a regular 40­hour week. However, due to the workload for producing part 3079, it has been

necessary to schedule frequent overtime for him in order to finish the necessary parts on time.

Coral Snodgrass, operations manager for Space Age, has just heard from Ed’s foremen that Ed is

becoming unhappy about so much overtime. As Coral knows, Ed has been with the company a long

time and is an excellent, reliable employee. Skilled machinists with Ed’s experience and employment

record are extremely difficult to find. Coral wonders what can be done to alleviate this problem.

Recently, Space Age began using an MRP system that has helped reduce inventories greatly and

improve on­time deliveries. In fact, Space Age carries no finished­goods inventory. Instead,

everything in the master schedule is being produced for customer orders, so all products are shipped

almost immediately. Previously Space Age had estimated that it cost $1.25 per week to store each

Gemini and $1.50 per week to store each Saturn that wasn’t shipped immediately. The master

schedule for producing these two items for the next six weeks is shown below.

Master Schedule

Week

1 2 3 4 5 6 6

Gemini 600 400 700 500 400 600 600

Saturn 300 400 400 600 300 300 300

The part in question, 3079, is used in two different subassemblies: no. 435, which is used in the

Gemini TV stand, and no. 257, which is used in the Saturn microwave stand. One of part 3079 is

used in each subassembly, and one of each subassembly is used in each of the final products.

Part 3079 may be produced in any quantity since the lathe that makes it is not used for anything

else. However, both of the subassemblies are produced using the same equipment. To minimize

change over time, Space Age has decided that these subassemblies should be made in minimum

quantities of 1,000 at a time, although there is no problem with capacity on the equipment that

makes them. In fact, an order for 1,000 of subassembly 435 is due to be received in week 1, as is an

order for 1,000 of subassembly 257. Lead time for both these subassemblies is one week, and no

inventory is expected to be on hand for either part at the beginning of week 1. There is not any onhand

inventory of part 3079, and there are no orders in process.

Ed Szewczak earns $22 per hour and gets a 50% premium for any overtime work. Whenever part

3079 is made, there is no set­up time, but processing takes 0.03 hour per unit. It costs $0.25 per

week to hold any of these parts over from one week to the next. The cost of holding each

subassembly in inventory is $0.75 per unit per week.

 

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