PLease read attached carefully and make sure you understand the assignment and requirements: 8 page paper, work cites, excel with multiple sheets, and powerpoint.
You will need to research the cost of steel coils (hot or cold rolled) to determine your material cost. Use only reliable sources, Wikipedia is not a reliable source. Your team must determine what a reliable source is and cite your source.
To forecast pipe production, you will need to evaluate the raw material cost from previous years. Use at minimum 20 years of raw material cost (hot or cold rolled steel); and other variables (iron ore/ oil) or any others you think will determine demand. You may use more year’s data if you choose. HINT! – You are forecasting demand for raw material(coils).
Once you have sufficiently forecasted the raw material cost, you will need to plan operations to facilitate the increase or decrease of production in your facility. Please use the appropriate forecast and explain why you chose that specific model.
1 Rolled Steel Coil = 5,000 tons
Current price per ton = $900
Estimated Steel Pipe Produced from 1 coil = 10,000 pieces of pipe Current Daily Production = 1,000 pipe per day
Currently Yearly Production = 365,000 pieces
Current number of steel coils used yearly = 37
Current budget for coil purchases – $166,555,000
Pipe sales price = $1,800 (per unit)
Work Schedule is as follows for CURRENT PRODUCTION
Hours = 12hrs/ day (365 days) Workdays per week = 7 Daytime shift only
To determine pay for employees use every two weeks’ pay structure. Start January 1st.
For assignment purposes we assume no shutdowns or maintenance issues.
Supervisors pay = $45/hr.
Crane pay = $35/hr. Operator pay = $35/hr. Inspector pay = $30/hr.
IT technician pay = $25/hr. Forklift Operator pay = $25/h Grinder/ Cutter Pay= $20/hr. Helper Pay = $15/hr.
Areas of Production
(assume employees needed for per shift, remember there is an A & B shift)
Slitter = 1 supervisor Operator = 1
Helpers = 2
Crane Operator = 1
Forming = 1 supervisor Operator = 2
Helpers = 4 Cutter = 1
QA/QC = 1 supervisor Inspectors = 4
Helpers = 2 Grinders = 2
2 forklift operators 2 Helpers/Flaggers
IT = 1 technician
The storage yard at your facility currently has the capacity to hold 40 steel coils. It is important for you to maintain the appropriate amount of inventory for production. Remember assuming production is constant 365days.
Based off your forecast, determine if you will need to increase or decrease storage capacity for your facility; then add a 20% increase in coil inventory to cover scrap and mistakes.
Based off your forecasted demand of coils annually, determine the fixed order size. The annual holding cost is 1,000 per coil and 2,500 to process an order. (Use appropriate economic order model) How many times per year do you need to reorder? What is your total carrying and ordering cost? What is the length of your ordering cycle?
Develop a logistics plan based the following information. Determine which route is the best route. Explain your answer and express your cost structure in an excel table.
Assume the following:
Your location = Houston, TX
Distribution Center A = Corpus Christi, TX Distribution Center B = Fairfield, AL Distribution Center C = Chicago, IL
Gas = $3.50/gal
Trucking mileage cost = .66 per mile Driver hourly rate = 35/ hr.
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