Hw Assignment

Complete both part one and part two of this tutorial and submit answers within one pdf or word document. This tutorial will be assessed and feedback will be provided. Total time for this activity is 1 Hours. You are not required to provide lengthy answers. Objective of the exercise is to assess your understanding on produce design and costing.

Part 1 You are newly appointed as the Manufacturing Manager for an exclusive luggage manufacturing company, currently producing a standard carry on travel bag. Due to the sales success recorded in the past years, the organization is ambitious to improve its production with the intention to broaden its product portfolio.

Zip

Hook

Following is a breakdown of the costs needed to produce 100 bags which is typically the production for one day.

Souring of Standard Components#  Hooks – 200 at £12 for 100 pieces  Zip – 100 at £10 for 100 pieces  Print Sticker- 100 at £50 for 1000 pieces

Material for the bag: 200m special leather at £20 per meter Material shoulder straps: 50m Rexene at £10 per meter

Processing: Cutting : 10 units/hr at £390/hr Stitching: 10 units/hr at 900/hr

Fixed cost: Machine tools and fixtures: 2.6Million/Line at 10Million/line (lifetime)

Overhead for one days operations: £200 Assembly time. Zip:  Qty: 1  Handling time: 20sec  Insertion time: 180sec Hook:  Qty: 2  Handling time: 20sec  Insertion time: 120sec

Print:  Qty: 1  Handling time: 10sec  Insertion time: 30sec Assembly cost for an hour is £9

Question 1 As the first task in your new position you are required to make a decision whether to automate the current manual operations. Automation guarantees the same quality as a Unit Cost of Manufacturing at £590. Make a decision considering only the unit manufacturing cost. Justify your choice.

Hint: you are required to justify your answer with workings of the unit manufacturing cost calculated for the current manufacturing process. First Calculate the Total...