Nagarjuna Vutkuri Swamy

Phanindra Kumar Sasanapuri

Holding Cost %
Holding Cost $
Days/year
Avg Daily Demand
StdDev Daily Demand
Annual Demand
Service Level
Z Value
Casting Cost
Machining Cost
Prodn Rate/day
Setup/Ordering Cost
Avg Setup time
StdDev Setup time

Current New Process Vendor Base

27%
27%
27%
$6.03
$5.97
$6.30
250
250
250
198.7333
198.7333
198.7333
34.844
34.844
34.844
49683.325
49683.325
49683.325
99.70%
99.70%
99.70%
2.7477813854 2.7477813854 2.7477813854
$16.35
$16.35
$16.35
$5.98
$5.75
$7.00
275
450
$
3,000.00 $
500.00 $
300.00
3.368
2
4.284
0.811
0.1
1.615

ERS/EOQ
Run Time
Inventory Max
Safety Stock

13352.2230079 3861.58942386 2174.48104901

48.5535382104 8.5813098308
3703.01813263 2156.19740286 2174.48104901
476.450908633 145.99896027 903.902608897

Annual Setup Cost

Annual Holding Cost
Annual Acq Cost
Total Annual Cost

11,162.93 $
6,433.01 $
6,854.51
$14,035.50
$7,304.19
$12,553.16
$297,106.28
$285,679.12
$347,783.28
$ 322,304.72 $ 299,416.32 $ 367,190.94

$ 22,888.40 Savings on using the new process

0.0710147708 Savings percentage of new process co

Ans 1)The New process of using the new equipment would result in the lowest total annua

Ans2) The three critical failings of the analysis which prevent from making a clear recomm
i. The Cost of new equipement, training of people to operate the new
ii. The depreciation of new equipment as being considered in case of t
iii. The machining cost, setup cost, setup time and production rate of t

Vendor Discount
27%
$6.28
250
198.7333
34.844
49683.325
99.70%
2.7477813854
$16.35
$6.91
$

300.00
4.284
1.615
5000
5000
903.9026088974

2,981.00
$21,379.49
$343,435.98
367,796.47

s on using the new process

s percentage of new process compared to current process

result in the lowest total annual cost for machining and inventorying 795GTX water pump housings

nt from making a clear recommendation as to which of the four options is best for the firm are:
g of people to operate the new equipment and ongoing maintanance have not been accounted in th
as being considered in case of the current equipment has not been considered in the analysis
p time and production rate of the new equipment has not been validated or tested.

water pump housings.

for the firm are:

been accounted in the analysis.
in the analysis