XYZ Plumbing Company  ,CAST STUDY  solution

Read the following case carefully and answer the questions given at the end :

(a) Suppose you were asked to set up a cost-control program for an established automobile manufacturing firm. Explain briefly, the steps you would ieel were absolutely vital for such a program.

(b) XYZ Plumbing Company uses 10,000 units of a particular valve per year. Each valve costs Rs. 32. The production engineering department estimates set-up cost as Rs. 55 and the accounting department estimates the holding cost as 72.5Vo of the value of inventory. Replenishment rate is uniform 120 valves per day. Assuming 250 working days, calculate :

 (i) optimal order quantity

 (ii) total inventory cost on the basis of optimal policy, and

(iii) optimal number of set-ups. 70+10

7 . Write short notes on any four of the following :

 (a) Zero defects

 (b) Bill of Materials

 (c) PreventiveMaintenance

 (d) The Kanban System

 (e) Flexible Manufacturing System 

(f) Process Capability Index (Co)