Subassemblies

Subassemblies - Subassemblies Prof. How s s...

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Subassemblies   The Americas Business Game
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Prof. Nathan Globus Shows You  How Prof. Globus will take you  through the factory’s use of its  Subassembly raw materials. His examples will use the cost  information associated with the  game’s first business quarter.
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What Prof. Globus Will Cover Ordering Subassemblies Grade mix effects on the product’s  physical quality The production possibilities curve for  given inventory levels Subassembly cost contribution to the  unit’s manufacturing cost Minimizing Subassembly costs Targeting the product’s physical  quality The accounting ramifications of  Subassembly operations 
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Ordering Subassemblies Production raw material needs must be  ordered at least one quarter in advance. Three different A, B and C Grades of  Subassemblies can be ordered. Subassemblies are ordered in lots of 100. Each washing machine needs  Subassemblies from both Groups. Production stops when the factory runs  out of any one of the Grades from any of  the two Groups.
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Washing Machine Subassembly  Requirements Each washer requires a different number of components  regardless of its grade. The Deluxe models require more subassemblies. Your firm must anticipate the total number of  Subassemblies needed for future production needs. Group 25-Inch 27-Inch 1 8 9 2 6 7
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Subassembly Proportions Each washing machines  Subassembly  component mix. 0 5 10 15 20 25-Inch 27-Inch Set Size Subassemblies Group 1 Group 2
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A Subassembly Order The firm is ordering  31,000 Group 1 Grade A  Subassemblies to be  available in Q2YR02. 3,500 Group 2 Grade C  Subassemblies have  been also ordered for  the same quarter. Prof. Globus is also  ordering other  Subassemblies from  Group 1 and Group 2.
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Resulting Grade Proportions The proportions of  each Grade in his  order are biased  towards Grade B. This should result in  a “middle grade”  product based on the  Subassembly mix  ordered. Subassembly Order Percent Group 1 Grade A 31,000 44.6% Group 1 Grade B 36,000 51.8% Group 1 Grade C 2,500 3.6% Total 69,500 100.0% Group 2 Grade A 27,000 41.2% Group 2 Grade B 35,000 53.4% Group 2 Grade C 3,500 5.3% Total 65,500 100.0%
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Grade Mix Effects On Physical  Quality Each Grade makes  a particular  contribution to the  product’s quality. Each Grade has its  own price tag or  cost which may  change during the  game. Subassembly Quality Group 1 Grade A 10.0 Group 1 Grade B 7.5 Group 1 Grade C 5.0 Group 2 Grade A 10.0 Group 2 Grade B 7.5 Group 2 Grade C 5.0
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Drawing Subassembly Inventories Prof. Globus calculated the run’s Subassembly  requirements to be the following for his  production run of 2,500 Basic washers and 4,850 
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This note was uploaded on 03/30/2012 for the course BUS M 490 taught by Professor Robbjense during the Winter '11 term at BYU.

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Subassemblies - Subassemblies Prof. How s s...

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