Space Age Furniture Essay Example | Topics and Well Written Essays - 1250 words

Space Age Furniture - Essay Example Space Age Furniture manufactures tables and cabinets to hold portable televisions and microwave ovens. It has the part no. 3079 which is used in two subassemblies, no. 435 used in Gemini TV stand and no.257 used in the Saturn Microwave. Using a lot size of 1,000; Using the master schedule, in week 1, 600 Gemini and 300 Saturn were made. Here, parts no. 435 and 257 were use in the subassemblies and part 3079 were also each used in each sub assemblies to make the final products. Therefore, to make the final product in week one; To improve the over sub-assemblies in lot sizes of 1,000, the management can increase the demand for the final product so that, all the sub-assemblies produced can be used in the production of the final product (Gray, 2000). For this mater, any week when sub-assemblies of lot sizes 1,000 are produced and the number is higher than the minimum required, the rest can be used for production in the next or the following week following the week in question. For this problem, if the sub-assemblies of lot sizes 1,000 have produced a lumpy demand for part no. 3079, it therefore means that, the demand for the different subassemblies such as part no. 257 and part no. 435 must also increase, hence increasing the demand for the subassemblies used to produce the final product. To make good use of this, the over demanded quantity of part no. 3079 can be used to produce more final products to boost profits (Magee, 2010). Any overtime work, the machinist is paid a 50% premium. If he is paid $22 on normal working hours, it means, during overtime, he is paid $11. On the other hand, inventory costs include $0.25 to hold any part per week and it also costs $0.75 to hold the sub-assemblies in inventory per week. This means that it costs $1 to hold all these components in the inventory per week. It means therefore that, for every hour, overtime is paid at $11, for a whole week, there are 40-hours worked. It therefore shows that, the on each unit produced,