Posted: September 13th, 2017

Operation Management

Paper, Order, or Assignment Requirements

 

 

DC Delco Corporation

DC Delco Corporation manufactures and sells the various electrical parts. One of the best- selling products is an electric motor. The company recently received a $750,000 order for various quantities of three types of electric motors: Model A, B, and C. More specifically, the firm received the following number of orders for each of the three electric motors.

Model A Model B Model C
Number Ordered 3,000 2,000 900

Each electric motor requires a certain amount of time to wire and harness. Model A requires 2 hours of wiring and 1 hour of harnessing per unit; Model B needs 1.5 hours of wiring and 2 hours for harnessing per unit; and Model C requires 3 hours of wiring and 1 hour of harnessing per unit. Unfortunately, DC Delco does not have enough wiring and harnessing capacity to satisfy the order by its due date. The firm currently has only 10,000 hours of wiring capacity and
5,000 hours of harnessing capacity available to devote to this order. However, the company can subcontract any portion of this order to one of its suppliers. The unit costs of producing each
model in-house and buying the finished products from the vendor are summarized below.

Model A Model B Model C
Cost to Make $50 $83 $130
Cost to Buy $61 $97 $145

You have been hired by the CEO of DC Delco, James Strong, to determine the number of electric motors to make and the number to buy to fill the customer order at the least possible cost.

**Directions**: This case analysis can be done either individually or by a team with a maximum of three students. Prepare a three -page (maximum) business memo to James Strong, outlining your analysis, explanation, and conclusion. Submit your business memo on April 17, 2015 (Friday), 11 am. (No Exception). On the main body of your business memo, identify and explain your decision variables to solve the problem. Using the decision variables, you are required to write down the mathematical equations representing this problem and to use Excel Solver to solve the problem.**(Include and explain all of the mathematical equations on the main body, and also attach Excel Solver results at the end of your business memo as your supporting materials. Make sure to include your team members’ names and their roster numbers on the
memo, too.)**

Use the memo writing guidelines (sample business memo) from the course website as your reference. Do not simply follow the guideline. Your business memo should be clear, in detail, professional, and self-explanatory. Along with your thorough analysis, a good organization and 

flow of paragraphs and sentences, clarity and correctness, and your writing are important in the evaluation.

If the case analysis is done by a team, a team evaluation will be conducted after submitting the memo to reflect your contribution to the analysis.

Checklists for Your Business Memo:

(1) Do you have a maximum of three pages, including all of your supporting materials?
(2) Did you identify and explain your decision variables on the main body of your memo? (3) Did you include and explain all of the mathematical equations on the main body?
(4) Did you attach Excel Solver results, showing your total cost, at the end of your memo? (5) Did you complete a final editing before submitting your memo?
(6) Did you include your names and roster numbers?

 

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