Inventory and Operations Management

Delta Water Treatment Units and Chemicals

Assignment requirements

You have been engaged by DWUC to act as their consultants. Your high level tasks are to:

Objective 1: Analyse DWUC existing manufacturing operations and develop an integrated set of recommendations to enhance customer service levels, reduce overall lead times, whilst reducing operating costs.

Objective 2: Address the ineffectiveness of the companys inventory management policy by reducing current stock levels, maintaining service levels to customers and release cash which the company can utilise in manufacturing.

Objective 3: Produce a consultant-style fact-finding report for DWUC to improve their business

You have to provide a single group report and an accompanying excel file for demonstrating your calculation. Excel file need not be uploaded to turn it in.

The total word count for questions 1 to 3 is STRICTLY limited to 2000 (± 10%). As the audience would be a business, the report must be concisely written. The main body of the report should cover the following aspects:

Question 1. Identify the problems associated with the current manufacturing system, particularly comment upon shop floor operations and manufacturing planning and control systems.

Question 2. Suggest alternative manufacturing planning and control strategies (MRP/JIT/Hybrid) to the company and provide reasons for your recommendations. There should be linkages made between the manufacturing planning and control system and shop floor operations.

Question 3. Provide a set of recommendations for improvement focusing on the issues raised in the case. These recommendations should show enough detail to demonstrate how your solutions would work in practice.

Style: Additional 10 marks will be awarded for style and presentation of report.

From Q4 to Q7 are calculation based question for which the answer and the procedure to calculate them is to be written down in the report and submitted along with the first three questions in a single report. Please upload this report with Q1 to Q7 on Turnit in.

Note that the report's words count is only for the first three questions (Q1 to Q3) and the word count of Q4 to Q7 will not contribute towards the word count restriction.

In answering each question, write down all the equations used for calculation and where appropriate please include carefully labelled figures and tables when presenting results. Ensure each equation, figure and table is numbered, has a meaningful heading and that all axis are clearly labelled.

Question 4. Inventory segmentation is a necessary step for inventory planning. Based upon the data given in the excel file answer the following;

(i) Segment the consumable inventory based on the value-usage criteria. Present and discuss the results including a graphical representation of Pareto principle.
(ii) Explain Five other segmentation criteria that could be used for such a firm.

Question 5. Determine the total value of consumable inventory held in the stock and the cost of holding the stock per year. This is to be calculated assuming an annual holding rate of 27% and that the 10 weeks of stock holding policy is strictly implemented.

Question 6. Using the EOQ model, for consumable inventory, calculate the total annual cost for the company (this will be sum of all individual items) . Also determine the EOQ and re-order point (ROP) for every individual item. Define and show formulas for all the parameters you are using for calculation with the assumption that demand and lead time are constant. Assume that the cost per order or setup cost is £ 10/order.

Question 7. For the SKU Number 148, Item number 278639 which is product LBPK 44, if this is the only data of demand that is available to you. Use three different methods of forecasting to forecast the monthly demand for the year 2022 for this product.