What is the consumption?

Topic 2, CASE STUDY 2

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Current environment

Products manufactured

– Cleaning equipment

– floor cleaner

– pressure washers

– scrubbers

– vacuums

– Liquid cleaning solutions

– No scent

– Orange scent (subcontracted to a vendor named VendorA)

– Pine scent (subcontracted to a vendor named VendorA)

The production quantity for the finished unscented liquid cleaning solution is 40-liters. IngredientC for unscented liquid cleaning solution is stored in inventory in 50-liter barrels and allocated in 50-liter increments. Two barrels of IngredientC are used to produce a barrel of unscented liquid cleaning solution.

Production sites

The Eastern United States facility manufactures equipment.

The Western United States facility manufactures liquid cleaning solutions.

Raw materials and finished products are stocked at the warehouse and distributed from the warehouse.

Warehouse facilities

The warehouse consists of the following zones:

Requirements

Cleaning equipment manufacturing

You identify the following requirements for manufacturing cleaning equipment:

– Production is Make to Stock and must be scheduled at an operational level.

– Machine equipment is produced on an assembly line. Scheduling must be based on production orders.

– Finished products must be packaged and shipped directly from the warehouse.

– To reduce delivery times and excess inventory, equipment must be produced as needed.

– The ability to schedule production must be based on resource capacity and the availability of required material.

– Production order operations must be scheduled to start only when capacity and materials are available at the same time and in the required quantities.

Liquid cleaning solution manufacturing

– Production is Make to Order and is scheduled at the job level Products must be manufactured in batches.

– Finished products must be packaged and shipped directly from the warehouse.

– You must be able to calculate the estimated consumption of ingredients and ensure that the amount is divisible by the number of units the raw material is available.

– Formula changes must be reviewed and approved. You must ensure that approved formulas cannot be deleted or edited. Approved formulas may be deactivated.

– An ingredient used to manufacture unscented cleaning solution is defined as a restricted product. You must be able to automatically print a product safety data sheet (PSDS) with the packing slip for any order that includes unscented cleaning solution.

– Production must be schedule to start by date and time according to the order that is specified by the production route.

– You must implement a scheduled Kanban rule that meets the following requirements:

– Prevent overloading a work cell for scheduled Kanbans.

-Visualize excess inventory in a supermarket.

– Store products in supermarkets before they are consumed or shipped.

– You must link relevant financial dimension data to the inventory transactions at each site to ensure that you can trace profit and loss figures directly to East site and West site respectively.

– You must set up production operations for sub-contracting of Pine scent and Orange scent solution to VendorA to ensure that a purchase order is automatically created base on estimation of a production order.

Costing

– The price of raw materials used for manufacturing unscented cleaning solution must be tracked based upon commodity exchange pricing. The margin and cost multiplier must be set up for commodity traded raw material.

– You must set up cost calculation groups to ensure that indirect costs that originate in the manufacturing of finished goods are recognized and absorbed into the product cost.

– The production manager needs to set up picking list journals and BOM item consumption.

Reporting

– Production control parameters must be setup for reporting of automatic BOM and Route consumption.

– You must create reports that include information about cost records and categories for items, and calculation formulas for indirect costs.

– You must treat manufactured items as purchased items for cost roll-up purposes during BOM calculations and reporting.

– You must configure automatic route consumption in connection with the automatic running of Report as finished.

Inventory control

You must not be required to track the lot number for items when you enter inventory information into the system. Lot numbers for items must be entered when items are picked from inventory.

Issues

Users report the following issues:

– The production manager observes that items are being deducted from inventory two times on production jobs. A shop supervisor mistakenly registers the process for assembling batteries for the pressure washers to Registered as prepared. You must reschedule the process for a future date.

– Customer1 orders 20 barrels of unscented solution. The order is confirmed. Production must be scheduled to start on December 21 to meet the customers delivery deadline.

– User2 reports that costs for manufactured items are twice as high as expected.

– UserD reports that the formula for the liquid cleaning solution sometimes changes during production. You must enforce the policies regarding formula editing for current and future use.

HOTSPOT

You need to calculate estimated consumption of ingredients for liquid cleaning solution.

What is the consumption? To answer, select the appropriate option in the answer area. NOTE: Each correct selection is worth one point.

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