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You have been assigned the Vision Plastics Company project as an assistant operational research analyst with C.A. Head Management Consultants.
The following is a transcript of a recent conversation you had. Mr. Derrick Solomon, Vision Plastics' manufacturing manager
Mr. Scholar: Hello, sir. What can my company do for you?
Derrick, Mr. Mr. Student, good morning. I am the production manager of Vision Plastics and would appreciate your assistance in developing a production plan for the next three months, from June to August.Mr. Student: Kindly sir, could you please give me an overview of you company?
Mr. Derrick: The Company of Vision Plastics was started about 20 years ago in Edinburgh by a group of two young men who had a dream for their lives. They ended up calling the name of the company Vision therefore. With a vision to produce a variety of molded polypropylene products, the company has since grown. The young men depended on the little savings they had in the bank together with some family savings. In addition, as a company reliability of bank loans has been relied a lot in steering the company to its current level of growth of approximately $15,000,000. All in all, the company is unable to meet the current rise in demand at the chains of retail shops and supermarkets in Edinburgh. In the coming summer holiday for instance we feel that we may not at all meet all the contract terms given the current shortage of machines, cost of production, labor, and transportation costs among others.
Mr. Student: So, do I say that you need some help on how to handle your production processes to meet the demand over the summer holiday?
Mr. Derrick: Yes sir. Our company specializes in production of bins during the summer holiday due to their rise in demand during the holiday: bin style 19 and style 20. The bins are very unique making almost the entire population prefers them. The style 20 bin enhanced with a broader base making it more lovable to be relied as a holiday basket. Style 19 is also unique but is more suitable to be used at the home place or for shopping. In this quest to meet the rising demand, we have assembled two kinds of machine to produce the different kinds of bins Avis machine and Burns machine both with a capability to produce each type of the bins in all the three months during the summer holiday. All the machines have the same capacity of production of 3000 units of bin meaning we can produce a maximum of about 36000 bins over the period of summer holiday.
Mr. Student: I see sir, and exactly where can I help you?
Mr. Derrick: I would like your assistance with the planning of the production of the bins to maximize it so as to meet the target number of bins of 36000. It is only possible to rely on the two machines available in the production of these types of bins without the possibility for another kind of machine dedicated to the same production.
Mr. Student: What is the capacity availability for the two types of machine during the summer holiday?
Mr. Derrick: My supervisor in the production sector reported that it is as follows
Moulding Machine Production Hours Available per Type of Bin
Mr. Student: What’s the main difference between the two types of molding machines?
Mr. Derrick: The Avis machine produces at a faster rate than the Burns machine. For instance for the production of S19 takes it 0.15 in June while it take Burns 0.2.
Mr. Student: What are the two types of bins selling at?
Mr. Derrick: Style 20 goes for $9 while style 19 goes for $7.
Mr. Student: what the production costs?
Mr. Derrick: The labor for both is equal at $5. The packaging and transportation take about $0.25 for S19 and an equal amount for S20 too. Material costs $ 3.5 and $ 4.2 per bin.
Mr. Student: How sufficient is the storage system?
Mr. Derrick: the ware house space is not enough given the more rate of production during summer and the need to increase the storage of the large number of raw materials purchase to facilitate the production. If need be cans are stored at hired warehouse at about $ 0.25. Within the vicinity though there is other storage that can be hired.
Mr. Student: What exactly are trying to put across?
Mr. Derrick: As a company we wish to establish the maximum each machine can produce for every month to help us meet the rise in demand and the best way we can reduce the cost of storage within the period.
Mr. Student: That means we have 36 variables for production and 36 variables for the storage problem. Mhhh! That makes 72 variables in total, quite arithmetic. What’s the main idea here? Is it to increase the production and reduce the cost of production at the same time?
Mr. Derrick: Yes, we would like to have the maximum number of bins we can produce during the summer holiday while holding down the cost of production as low as possible.
Mr. Student: I guess the cost your planning to reduce involves all incurred expenditure at all the levels of production?
Mr. Derrick: Yea, yea.
Mr. Student: Ok, so far so good. Can we call it a day sir for now and kindly leave your contact and be readily available in case I have anything burning concerning what we have just discussed.
Mr. Derrick: Well, that ok. I shall leave my contact with your secretary so please feel free to contact me any time. In our nest meeting, I shall be very eager to get your solution.
Mr. Student: Absolutely sir! May propose our next meet happens after one week so that we deliberate on the issues you have just presented please?
Mr. Derrick: Its very ok sir. It has been such a pleasure. Thank you so much!
Mr. Student: Welcome sir (shaking hands)
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