Parker Earth Moving Company Consulting
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Parker Earth Moving Company Consulting: Session 1
Customer Requirements
How We Determined the Requirements
The needs of the customer are determined by analyzing the data provided by PEMC. The data demonstrates that the organization has the capacity to produce 10,000 units per month with employees working two shifts per day, five days per week. To meet the customers needs, the company has to increase production to 30,000 per month. Including a third shift during the day, and adding one additional day per week is in the best interest of the organization to meets customers needs and keep up quality control. Team D has identified two small manufacturing companies who can help with the shortfall and meet the actual demand. Both subcontractors can help produce the additional units that are required for the quarter and both can meet the quality standards.
Subcontractor A Option
Subcontractor A and B are both capable of meeting PEMC manufacturing and quality standard requirements. The choice for PEMC must be Subcontractor A due to the cost and the lead-time linked with producing the item. PEMC must decrease any extra cost linked with this project hence the final cost of the item stays in a range the customer is ready to pay. The additional time it takes for subcontractor A to manufacture the item is sufficient since it will let the organization to transfer some of the stock presently stored in the warehouse. PEMC also requires the extra time to make sure the aggressive prediction is precise. Having too much product kept in storage can be a damaging problem for the organization since the extra stock will cost the organization money in storage charges and the lack of sales from over predicting wont offset the difference.
Subcontractor B Option
In the course of the analysis of subcontractor A and B, A is the option to make due to the price point of $82 as contrasted to the cost point of $88 per unit. The lead-time advantage of subcontractor B does not go with the requirements of the Parker Earth Moving Company because the storage requests are by now met by the leasing of an off-site facility. Diminishing all expenses for the production of the navigational device is essential to reduce the loss of the extra expenses required for storage space and a subcontracting business.