Exam 7: Manufacturing Processes

The volume requirements for the product are one determinant of the choice of which process structure to select.

Distinguish between a work center and a manufacturing cell.

A manufacturer has identified the options for acquiring a machined part.It can make the part on a standard lathe for $250 per unit (including materials).It can make the part on a numerically controlled lathe for $150 per unit (including materials).It can make the part on a machining center for $50 per unit (also including materials).The manufacturer can acquire a standard lathe for $10,000.It could acquire a numerically controlled lathe for $100,000.A machining center would cost $350,000.It has also found that it can purchase the part for $350 per unit.What are the ranges in demand for which each method of procuring a part described above will be most economical?

The essential issue in satisfying customers in the make-to-stock environment is to balance the level of finished inventory against the level of service to the customer.