Integrated Case Study:
Krish Toys
Inc.
Krish
Toys, I
nc. will use the material studied in aggregate production planning and inventory management. The
students can work in groups of no more than five students in a group. The details of the case study
are given
below.
Krish
Toys
Inc. manufactures and supplies three
different Toys
(A, B and C) to several customers against
specific
orders. The products are similar with some minor design differences. These products require the same basic raw
materials and
are processed on the same set of machines.
DEMAND
The orders are received by the marketing department and are cumulated into three categories (A, B and C). T
he
demand forecast for year 2019
is given in Table 1.
Pitbull - Rain Over Me ft. Ma +1 xFIU Krish Toys Inc.pdf: QMB4680 RVF XKrish+Toys+Inc.pdfi FREE Florida DMV Written Test Si XYour Challenge BankTMWhatsAppHomework Help - Q&A from On xOXFile | file:///C:/Users/julio/Downloads/Krish+ Toys+Inc.pdfKrish+Toys+Inc.pdf1 /2C:Integrated Case Study: Krish Toys Inc.Krish Toys, Inc. will use the material studied in aggregate production planning and inventory management. Thestudents can work in groups of no more than five students in a group. The details of the case study are givenbelow.Krish Toys Inc. manufactures and supplies three different Toys (A, B and C) to several customers against specificorders. The products are similar with some minor design differences. These products require the same basic rawmaterials and are processed on the same set of machines.DEMANThe orders are received by the marketing department and are cumulated into three categories (A, B and C). Thedemand forecast for year 2019 is given in Table 1Table 1: DemDemand for 2019 in Thousands of UnitsProductFebJunAugSeptOctNovDecTotalRAW MATERIALThe amount of raw material required for each product is the same. Therefore, it may be assumed that one unit ofraw material is required for each one unit of finished product. The cost of raw material is $ 6.00 per unit. Thordering cost is $ 1,500 per order and the inventory carrying cost is $ 0.15 per unit per month. The orders for rawmaterials, if any, are placed at the beginning of each month. The lead time for receiving the material is one month.This means that an order placed in any month will be received at the beginning of the following month and will beavailable for production. Production suffers if there is not enough material in stock. There is no provision forstaggered deliveries. In addition to the basic raw material, the cost of other supplies is $ 1.00 per unit of finishedproduct.Currently (beginning of January 2019) there are 15,000 units of raw material in stock and there are no outstandingorders. These 15,000 units are available for use in January. There is no constraint on the warehouse capacity and,therefore, any amount of raw material and/or finished product can be stored.PRODUCTION CAPACITYThe production department can work in a single shift or two shifts. The single shift capacity is 10,000 units permonth which can be increased to 12,000 per my producing 2,000 units duringe. The two-shifting overtime. Thcapacity is 19,000 units. There is no provision of overtime in two shifts. It costs $ 4,000 to go from one shift to twoshifts and $ 3,000 to go from two shifts to a single shift in addition to the cost of changing the operating levelOperating levels can be changed in rounds of 1,000. This means that plant can operate at any level like 7,000,8,000, 14,000 etc. There is no cost of changing operating level up to 1,000 units, However, it costs $ 600.00 perthousand units for changing capacity (up or down) if change is for more than 1,000 units. For example, it will cost $1,200.00 and $ 1,800.00 to change capacity by 2,000 and 3,000 units respectively. If the plant is operating belowO Type here to searcheENG3:58 PM1/14/2019
