BUS644: Operations Management: Space Age Furniture Company

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Furniture1Space Age Furniture CompanyRobert BacaBUS644:Operations ManagementProf.Jamal BattaFebruary24th2014Based on the case study of Space Age Furniture Company, analyze the impact of MaterialRequirements Planning (MRP) on inventory management, production scheduling, and overtimecosts. Discuss the potential improvements that could be made to the MRP system, particularlyfocusing on subassembly lot sizes, and evaluate the trade-offs between overtime costs andinventory costs. Additionally, compare and contrast different types of production processes (JobShop, Batch, Repetitive, and Continuous Flow) and recommend the most suitable productionprocess for Space Age Furniture Company. Include an analysis of how management can trackjob status and location during production and suggest any changes that could further enhanceoperational efficiency.Word Count Requirement:1,500-2,000 words.

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Furniture2Space Age Furniture CompanyIntroductionSpace Age Furniture Company manufactures tables and cabinets to hold microwaveovens and portable televisions. These products are made in various sizes and with variousfeatures, but all follow basically the same production and assembly operations. Two of theseproducts–the Saturn microwave and the Gemini TV stand have a part (no.3079)thatrequiresmachining on a special lathe used only for making that part. Space Age began using an MRPsystem that has helped reduce inventories greatly and improve on-time deliveries. Space Age hadestimated that it cost $1.25 per week to store each Gemini and $1.50 per week to storeeachSaturn that wasn’t shipped immediately. The master schedule for producing these two items forthe next six weeks is show below:Master ScheduleWeek123456Gemini600400700500400600Saturn300400400600300300Part 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 eachsubassembly, and one of each subassembly is used in each of the final products. Part 3079 maybe produced in any quantity since the lathe that makes it is not used for anything else. Space Agehas decided that these subassemblies should be made in minimum quantities of 1,000 at a time(Vonderembse & White, 2013).

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Furniture3This paper will develop an MRP for Space Age Furniture Company using the informationin the case including the production of sub-assemblies in lot sizes of 1,000. The lotsize of 1,000for sub-assemblies has produced a lumpy demand for part 3079. The paper will also suggestways for improvements over sub-assemblies in lot sizes of 1,000 while also analyzing the tradeoff between overtime costs and inventory costs. A new MRP that improves the MRP will also bereviewed along with a compare and contrast of the types of production processing anddetermining which the primary mode of operation is and why. Finally the paper will discuss theways that management can keep track of job status and location during production and alsorecommending any changes that might be beneficial to the company and/or add value for thecustomer.MRP for Space Age Furniture CompanyAccording to the case information provided for Space Age Furniture Company, there aretwo different subassemblies in the company. The first one is no. 435, which is used in GeminiTV while no. 257 is used in the Saturn microwave stand. In each of the two subassemblies no.3079 is used. Each of the subassemblies is also used in each of the final products. Based on thisinformation it is important to understand that the subassemblies play an important part in theproduction process. Including them in the development of the MRP is the first step.The threemost important data requirements of MRP are the master production schedule, bill of materials,and inventory records. The Master Schedule File is the master schedule and drives the systemand generates material requirements. This will be at the level of the subassemblies. The Bill ofMaterials serves two purposes; first it will list all the components of a product and the quantitiesneeded to make the product. Second, it shows the relationship amongst those components, whichindicates product structure, meaning that part 3079 is uses 257 and 435. The third thing is

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