# operation management (supply chain management)

The equation below represents due date quoting with “safety lead time”.   Why is it important to use a safety leadtime?  Which buffer is this using (time, inventory, capacity)?  What are you buffering with the safety leadtime?

### Problem #2:  (Batching)

In the graph below, please explain for each section (A,B,C):

*does the section contain the optimal batch size

*if not optimal, explain whether the cycle time impact is due to parts waiting in line due to high amounts of downtime or parts waiting in line for long jobs to get off the machine

### Problem #3:  (Inventory Strategies)

Explain how a leader in operations could use the following two charts to develop and execute inventory strategy:

### Problem # 4:  (Business and Operations Strategies)

In class, we discussed that key elements of deploying the Factory Physics Framework often include:

1.  Aligning Operations Strategy with Business Strategy
2.  Determining the Portfolio of Buffers at a Strategic Level
3.  Assessment of Utilization
4.  Finding the Bottleneck
5.  Using a WIPCAP
6.  Reviewing opportunities to optimize inventory including “Common Components for Assemble to Order”
7.  Setting Lead-times using the Concept of Due Date Quoting

Please discuss why each of these is important to analyze an operation and how it could be used in an analysis of the following medical device manufacturing business:

A Multi-Billion Dollar Medical Devices Company produces devices which are assemblies. Given the critical nature of delivery of devices to hospital and doctors, medical device companies do not want to stock out.  This medical device company in this case was plagued by long lead-times (2 months) and poor service (50%) from its internal plants to its distribution centers. The distribution centers compensated for the poor performance by holding a large inventory (order of magnitude in hundreds of millions) buffer of Finished Goods inventory in its warehouses.  This tied up valuable cash that could be used for R&D to fuel future growth. Below is a picture of a Demand-Stock-Flow diagram for the current process:

### Problem # 5:  (CSUITE Case Study)

In the CSUITE Case Study, the company could not address the high utilizations shown below by adding machines because it caused the company to lose money:

The company eventually reconfigured its portfolio of buffers to reduce utilization, improve customer service, create capacity for growth and remain profitable as show below:

Please discuss some of the actions the company took and relate them to the Factory Physics framework:

P(5.u)

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